§ 3.27 p.m.
§ Baroness BURTON of COVENTRY rose to call attention to the place of the consumer interest in public monopoly and private corporation; and to move for Papers. The noble Baroness said: My Lords, in rising to move the Motion which stands in my name on the Order Paper, may I start by saying that I have several reasons for being glad that we are discussing this matter today and perhaps some of them might serve as background for the case that I would hope to develop. The latest of these is the welcome announcement yesterday that the Government have set up the National Consumers' Council. All those interested in consumer affairs will welcome this and will wish the Council and its Chairman, Mr. Michael Young, every success.
§ My Lords, the consumer interest I would equate as the public interest and contend that this interest is as important as any other in public monopoly or private corporation. Past Governments, although gradually improving under constant pressure, have not previously accepted what is meant by the consumer or public interest in the 1970s. Indeed, wishing to be helpful so that we might have a more adequate answer in reply to this debate, officials asked if I could indicate those aspects of the consumer interest that I hoped to discuss today. My Lords, this is exactly where the conception 570 is wrong. I want to talk about the consumer interest as an entity, something complete in itself and entitled to an entirely new approach. This is not a cosy little debate about consumers; it is about something much more fundamental. I want to talk about the consumer estate in today's society. If we were to make any impact in this debate, it was essential that we muster speakers with a wide range of knowledge and experience. I think that the House will agree that we have been fortunate in this respect; and I am most grateful.
§ My Lords, I have divided my remarks into four main sections. This first one I have given the heading of "Reasons for raising and terms of Motion". In 1960 I became a member of the Domestic Coal Consumers' Council and later its chairman. I think it was a good Council, although too large. How effective were we? In my opinion, not very. Why? We did all we could within our terms of reference and we were well served by our small secretariat. Our ineffectiveness was due to three things: (1) our terms of reference; (2) our lack of funds leading to a small secretariat and no opportunity for research; and (3) our lack of publicity. We were just not known to the public in spite of all our efforts. I remember saying this to the House in my maiden speech some 13 years ago.
§ In 1968, the Consumer Council published an excellent book, Consumer Consultative Machinery in the Nationalised Industries, which my noble friend Lady Elliot of Harwood will recall, which made clear that the Council, too, considered the consumer councils of the nationalised industries to be ineffective. Indeed, when we recall that only last year the Consultative Councils of the nationalised electricity industry raised no objection to the proposed 70 per cent. increase in the charges for electricity in off-peak hours on night storage heaters consumers must indeed wonder who speaks for them. In looking at this general background, I then asked myself if any consumer council could be said to be effective. I came up with an answer that I think would be acceptable to most people dealing with consumer affairs. Yes, my Lords, the Post Office Users' National Council (POUNC).
§ Two questions arise from this. If POUNC is indeed effective: (1) how is 571 it different from other consumer councils ; and (2) why should other consumer councils not have similar teeth? In the first place, POUNC is different because both in its terms of reference and in its work it seems to have embodied most of the lessons to be learnt from nearly 25 years' experience. It was established under Section 14 of the Post Office Act 1969. Included in the duties listed is to consider any matter relating to Post Office services in the United Kingdom which the Council thinks it ought to consider: and the further duty to give notice to the Minister and to the Post Office of any such matter considered on which it is of opinion that action ought to be taken. The Post Office has a duty to consult with POUNC before it puts into effect any major proposals relating to its main services so as to affect the persons for whom they are provided. And so that the user or consumer may be sure of consideration POUNC has a duty to consider any matter "other than a frivolous one" which is the subject of a representation by or on behalf of a user.
§ The Council showed its determination to take part, and a central part, in forward plans of the Post Office. For example, as we all know, suggestions for increasing postal charges go first to the Council for their opinion. Whether or not that opinion is accepted is not the most important factor. The Council is asked and it is asked before action is taken. It has a chance to influence the final decision. Furthermore the Council has been able to employ the services of experts or consultants to enable them more effectively to discharge their role. I think this is the first time this has been done. The best publicity for the Council has been its work, and, if I may say so, the work of its chairman, my noble friend Lord Peddie. It seems to me that in these days of organisations growing ever larger, when consumers or users feel more and more that they matter less and less, that government should see that all consumer councils of the nationalised industries are now based on the model of POUNC. I say "nationalised industries", because this is where government can act.
§ My Lords, how difficult is it for consumer councils to be set up in the nationalised industries? I think not difficult in the present decade, except 572 in so far as air travellers are concerned. At some future date I am sure that the Civil Aviation Authority, the Airline Users Committee and government will have to study the terms of reference of the Committee, because this is a different breed of animal. As its name implies this Committee is indeed concerned with consumers and air travel, but it is responsible to the Civil Aviation Authority and reports to the Authority. One of the problems here is that it covers British airlines, and only British Airways (formerly BOAC and BEA) are nationalised. Still, I welcome the Committee of which I am a member and of which the chairman of the Civil Aviation Authority (the noble Lord, Lord Boyd-Carpenter) is chairman. The point I wish to make here is that this is a consumer committee that it was difficult to get established. Indeed this took 14 months and we succeeded only because this House refused to take "No" for an answer.
We come now to the main reason for this debate and particularly for the terms of the Motion—the withdrawal of check-in facilities at the West London Air Terminal. The House need not fear: I shall be succinct. Every noble Lord must know the details by heart. Briefly, for the purposes of this debate, may I list here the consumer position on this matter—not the merits or demerits: (1) this matter was contested in our House for 19 months; (2) it concerned a consumer facility affecting more than 1 million customers; (3) in the end, prior to the decision being put into effect, (a) the consumer council con-cerned (the Airline Users Committee) issued a statement on 21st November 1973 of which I will quote the first paragraph:
The Airline Users Committee deplores British Airways' intention to close down the West London Air Terminal check-in facilities. The Committee has discussed the subject with British Airways and is not satisfied that an adequate case for abandonment of check-in facilities has been established.
(b) the Heathrow Airport Consultative Committee of the British Airports Authority, in its Annual Report for 1973–74 stated:
Reductions in passenger facilities during the year have given the Committee cause for concern, and are to be deplored. The most important was the withdrawal of check-in facilities by British Airways (formerly BEA) at West London Air Terminal. The withdrawal was
opposed by the Committee but unfortunately without success.
(c) one of the Houses of Parliament (our own) in a debate on 20th December 1973 voted, decisively, by 82 votes to 28, against the plan.
What happened? The Airline Users Committee, with the following terms of reference:
To assist the Civil Aviation Authority in its duties in safeguarding the interests of airline users and to investigate individual complaints against airlines where the person or body aggrieved has not been able to obtain satisfaction from the airline concerned"—
was told by the Civil Aviation Authority that as the Authority had been aware of this project for some time and had not thought right formally to intervene earlier, the Authority would be likely to find it very difficult to intervene with British Airways at this very late stage. The Heathrow Airport Consultative Committee was ignored. Indeed, the British Airports Authority, charged with running Heathrow Airport, had never been consulted about a change which they would have to administer. The vote of one of the Houses of Parliament was ignored. This nationalised industry acted as judge and jury on a consumer issue. As Eirlys Roberts remarked in a letter to The Times on 24th January last year:
The disquieting thing about the check-in facilities at Cromwell Road is the way in which a nationalised industry failed to consult the public about what it was doing, failed to explain why it was doing it and refused to listen to the protests while it was being done".
Those then are the reasons for this Motion —reasons which have support from all quarters of this House.
§ I come now, my Lords, to my second main section which I have designated, "Nationalised industry and the consumer interest". I am hoping that other speakers today will comment on private corporations, but I want to deal with public monopoly—or nationalised industry. Particularly, I think, I wish to deal with the nationalised side for two reasons: (1) I have always wanted my noble friends to understand why, to me anyway, it seems worse if consumer representation is ignored in this sector. Government is able to insist on changes in decisions made by nationalised industry. This being the case, government has a role in connection with nationalised industry that it does not have with the private sector. (2) 574 I should like the consumer councils in the nationalised sector to be held up as models—and they are not.
§ The more one studies Reports from the Select Committees on Nationalised Industries the more one realises—as, for example, my noble friend Lord Shinwell knows from their inception—that all the points taken together reflect the hybrid nature of the public corporations and the rather grey areas in which they have to operate, despite their apparently precise statutory framework. On the one hand, their statutes clearly require them to follow what might be regarded as normal commercial aims; namely, the pursuit of economy and efficiency. On the other hand, they are publicly owned and subject to certain not necessarily clearly defined constraints, both specific statutory ones and other, vaguer, ones, which together recognise or imply that public ownership puts them in a special position with special obligations to consider the public interest, whatever that may be.
In 1971 Allen & Unwin published for PEP (Political and Economic Planning) a book by Mr. David Coombes, entitled State Enterprise—Business or Politics?, in which he says:
It certainly seems to be basic to the professional ethos of many managers in the nationalised industries that the ends they serve are wider in some way than those of a purely 'commercial' undertaking. This view is supported by the statutes, many of which place directly on the boards the duty to behave in some ways which could hardly be described as 'commercial' and sometimes use the very words ' in the public interest'.
I happen to believe in the public interest and I do not believe it to be incompatible with commercial good sense. I believe also that in this era when officialdom— good or bad, efficient or inefficient—is growing larger and larger, the consumer side is in danger of being swamped or of being regarded as a nuisance. That is a battle we must fight, and I want the whole House—and particularly my noble friends—to join in this fight to make the consumer councils of the nationalised industries models for others to follow.
If I may repeat what I said earlier, government is able to insist on changes in decisions made by nationalised industry. Reverting to Reports of the Select Committee on Nationalised Industries, it is obvious that all sponsoring Ministers have this power, but it is one
used very sparingly. Much of the decision-making takes place in private, and what is made public is only the bare decision. The noble Lord, Lord Thomas, made this clear to the House in a telling sentence in a debate on 20th December 1973, when he said this at col. 515:
As an ex-chairman of a nationalised industry, may I say that your Lordships would be surprised if you knew how frequently certain pressures are generated, and, by Jove, they work, believe me.
In the case of the West London Air Terminal, the then Government did not wish to exert such pressure. A recent case where Government did intervene—this Government in their previous Administration—was over the decision of the nationalised electricity industry to increase by 70 per cent. off-peak charges for night storage heaters. That decision was changed.
§ But if government will not intervene, what can be done? Obviously government will have the final say, but can their attitude be influenced in any way? To illustrate the practical difficulties, perhaps I might just outline the steps I took on this problem. If we see what did not work, we may be able to suggest solutions. And so I come to my third section. We would all feel that if one complains one should take what action seems possible. It may be that subsequent speakers can suggest additional avenues of approach, but I think it is important for the purpose of this debate that the House and the Minister ultimately responsible both realise the difficulties facing consumers. Briefly, I sought an inquiry by, first, the Select Committee on Nationalised Industries, but January 1974 (with an impending General Election) and March 1974 (with the uncertain life of a minority Government) were not auspicious dates for success. Secondly, I approached the Commissioner for Parliamentary Administration (the Ombudsman), hoping that some maladministration might be the pretext It was not to be. Thirdly, I approached the Director General of Fair Trading, but my complaint did not come within his terms of reference. Having respect for, and confidence in, both Sir Allan Marre and Mr. Methven, obviously I accepted, but with regret, what they had to say.
§ Following these efforts, I studied as well as I was able the Reports of the 576 Select Committee on Nationalised Industries to ascertain: (1) if decisions of nationalised industries were open to review; (2) if so, by whom and in what manner; (3) why such a case as that of the West London Air Terminal was not open to review; and (4) what changes were necessary either in consumer councils of the nationalised industries or in the Select Committee on Nationalised Industries, to preclude a nationalised industry from acting as judge and jury on a consumer matter without reference to anyone and avoiding any inquiry. One general factor ran through all the Reports—the assumption that nationalised industries had a "particular" or "special" requirement to pay attention to the needs of the consumer. Hence, government has a role in connection with nationalised industry that it does not have with the private sector.
§ And so I come to my fourth and final section. My Lords, what should be done? (1) POUNC seems to embody most of the lessons learnt in the past 25 years. Existing consumer councils should be similarly assimiliated in function. Any consultative machinery must need to employ a reasonable level of expert assistance as of right, and it must be seen to be competely independent; (2) although at the time the Select Committee on Nationalised Industries was unable to do what I asked, I did receive much help. As the House will have gathered, I got a good deal of reading matter, which I have studied to the best of my ability.
§ Concerning the affair of the night storage heaters, the then Chairman explained to me that the role of the Select Committee was mainly investigative and that this takes quite a lot of time, which obviously was not available in this particular case. The Chairman went on to say that he was anxious to have the Committee adopt a more speedy procedure to cover cases like this: one which would mean adopting procedures to cater for this kind of case. Without involving the Committee in my remarks, I should like here to express my appreciation of the consideration and general co-operation I was given.
My third point is that no public monopoly must be allowed to act as judge and jury on its own consumer affairs. Even Mr. Henry Marking in his letter to
The Times on 3rd January 1974 concerning the West London Air Terminal, which expressed approval of the stand taken by the Minister in not breaking
the rule against governmental interference in the day-to-day running of nationalised industries
went on to say
but I accept, of course, that this begs the difficult question of protecting the consumer interest".
§ My fourth point is this: who is to protect this interest? How can we be sure that it is considered at least as adequately as any other? Mrs. Shirley Williams said on 10th June 1974 that more powerful consumer voices were needed on nationalised industries. They are, my Lords; but they need both a powerful vehicle on which to sit and one so equipped by terms of reference that a nationalised industry has a duty to consult with it before putting into effect any major proposals relating to its main services so as to affect the persons for whom they are provided.
§ The demand today is for worker representation on boards. Why is consumer representation not included? Or, to take another example, NEDC ("Neddy"), where nobody thinks of having consumer representation as such. Why? The general answer, and one might say the invariable one that those of us dealing with consumer affairs so well know, is that we are all consumers. We are, my Lords, but not in the sense I am talking about. The consumer "estate" is not yet reckoned as one of the Estates of the Realm. That is the problem. That epitomises all I have been saying.
§ I could have enlivened today's debate with humorous or heartbreaking stories of the general public trying to get something done by gas boards or electricity boards—all of them true; none of them exaggerated. Sheer size has defeated ordinary contact. But people are reduced to despair, and sometimes I wonder whether those at the top really know. It does not happen to them: that is the whole point. If you sit on a board you get prompt attention, naturally. But it leaves you with no idea of what it is like at the other end. If you are the managing director of British Airways you have no conception of what it is like to endure the noise, the confusion, the crowds at Heath-row, of trying to cope with your luggage, 578 to get a porter, to find a trolley. You do not suffer from all this. If you are at the top of, say, the gas industry, you just cannot imagine the frustration of even trying to convey a message to the same person on the many occasions that you have to telephone, much less the agony of trying to get a job done. The public is feeling more and more frustrated. Do we indeed count for anything?
§ A small example, compared with many experienced by other users, happened to me with my gas board. Although it was a minor one, it illustrates the point I wish to make. The pilot light of my cooker does not co-operate well with natural gas. An appointment was made for ten days after visiting the gas show-rooms. On the day nobody came, so that was one day wasted. Telephoning the next day I was told that there had been a gas leak the previous day making my call impossible. But nobody telephoned to say so, or called. Going to the back of the queue, a further date was fixed. Again nobody came. So that was two days wasted. I then wrote to the chairman concerned. This produced an answer from lower down the line asking what the trouble was. I thought that if he read the letter I had sent to the chairman he would know. How many times are we asked to repeat the same information? This is neither the time nor place to dwell on my mounting frustration, but I have told the chairman concerned that I wonder whether customers have not now reached the stage when they should be able to send in a bill to the monopoly concerned for time wasted or taken off work and for the constant non-appearance of men when appointments have been made.
§ If complaints are written on notepaper from Lords or Commons, from news-papers or the media, attention is given. And here we should note that television and Press often play an invaluable role. But if you do not have this advantage, then you are a nuisance. You will eventually be given a date; frequently this date will not be kept, and you will have wasted a day or taken a day off work to wait at home. And, in the view of the officials concerned, you do not merit even the courtesy of an explanation or an apology for the inconvenience caused. Why? I had an excellent letter from the top expressing concern. This type 579 of concern should go from top to bottom of an organisation. What is wrong here? Is size the problem? Are these giant monopolies unmanageable? Is it lack of communication from the top? Why do people just not care? I think there is something grievously wrong. Why should the rest of us be expected to put up with this sort of thing? I suggest that every chairman of every nationalised industry should concern himself directly in this area of communication with the public. And I think this should have priority.
Although I am leaving the private corporation side to other speakers, I should like to mention a letter I received recently from a chief executive to whom I had had occasion to write. He says:
I was interested in your comment regarding the advantage of writing to the Chief Executive and I think you would probably be surprised at how many people do so, whether they know one or not. … I usually regard it as the ultimate act of complaint, or when they have no idea where else to write. From my point of view, I welcome that … opportunity to learn at first hand how various parts of our business are operating, and a great deal of good stems from the action that results.
So, my Lords, let the message go out from the Lords today: Write to the person at the top. I can think of no Minister to whom I would prefer this subject to go than the Minister for Prices and Consumer Protection—although I still dislike the term "protection". Paragraph 9 of the White Paper National Consumers' Agency (Cmnd. 5726) deals with nationalised industry consumer councils. We all knew that the Minister wished the consumer to be more strongly heard in this sector. I understand that one of the jobs of the National Consumers' Council will be to make representation of the consumers' view to central Government. At this late stage for us, but at an early one for him, I hope that Mr. Michael Young will have something to say about West London Air Terminal.
§ My Lords, my aim has been to set out some of the problems as I see them in the hope that Mrs. Shirley Williams can find the answer. The consumer estate is now one of the Estates of the Realm and should be recognised as such. I beg to move for Papers.