Clause 42 - Guidance on Requirements
Consumer Credit Bill
9:45 am
Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)
I beg to move amendment No. 33, in clause 42, page 33, line 27, leave out subsection (3) and insert—
'(3) The OFT shall have the duty to take all reasonable steps to ensure that the revised guidance is brought to the attention of those likely to be affected by it.'.
Mr Joe Benton (Bootle, Labour)
With this it will be convenient to discuss the following amendments:
No. 34, in clause 42, page 33, line 31, at end insert
', which shall include a representative sample of those likely to be affected by it.'.
No. 43, in clause 54, page 44, line 39, at end insert
', which shall include a representative sample of those likely to be affected by it.'.
Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)
These are technical amendments. Clause 42 concerns guidance on requirements of licensees, whereas clause 54 relates to statement of policy in relation to civil penalties. The amendments seek to place on the OFT a duty to take all reasonable steps to ensure that anyone who is likely to be affected by the guidance is notified. When drawing up that guidance the OFT should also have a duty to consult such persons as it thinks fit. However, that is already in the Bill. I seek only to add to that to include a representative sample of those whom it is likely to affect.
What does the Minister have to say about technical amendments? I reckon I can guess, but perhaps they will be moved.
Mr Alistair Burt (Parliamentary Private Secretaries To Leader of the Opposition; North East Bedfordshire, Conservative)
May I say, Mr. Benton, how much I welcome being under your guidance this morning? I apologise to the Committee for not being here for the earlier parts of this important Bill. I particularly welcome the presence of the Minister. He and I go back many years, largely through our friendship on the football pitch. We have been regular performers, if I can use that word in the context of the parliamentary football team. The Minister has established an excellent reputation as a stopper of first rank. Between the sticks, I must say that the Minister's skills at preventing things getting past him have become legendary in the dressing room. Seeing him in action and how he manages to hold up the skilful interventions of my hon. Friend the Member for Tewkesbury, I realise that his powers of stopping things are not confined to the football pitch. It is a great pleasure to see a friend in that position.
Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)
Does the Minister always have the benefit of the officials on his side?
Mr Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations, Competition and Consumers), Department of Trade and Industry; Bradford South, Labour)
Usually.
Mr Alistair Burt (Parliamentary Private Secretaries To Leader of the Opposition; North East Bedfordshire, Conservative)
If the impartiality, wisdom and skill of the official who presides over the Committee this morning were transferred to the football team, I am sure the Wobblers would have won many more games than we have.
I support my hon. Friend on the technical amendments. Like the majority of the Committee, I welcome the balance of the Bill, which is designed to protect consumers further, for reasons set out on Second Reading and in earlier meetings of the Committee. All of us have, on occasion, seen constituents in extraordinary distress over agreements they have entered into—sometimes unwisely with full knowledge, sometimes unwisely lacking knowledge—and who have ended up in situations that they would rather not be in. We have been involved not only professionally, but sometimes with a degree of personal upset in trying to deal with the mess that some people get themselves into.
My history on these issues goes back many years, and I commend the activities of Credit Action, people like Keith Tondeur who have spent a lifetime working with those in debt, and Bob Holman in Easterhouse, whose work was recognised in some of our briefings. They have worked with some of the poorest people in dealing with those problems.
However, credit exists and is necessary for many people to get through particular difficulties. The aim of the Bill is not to set up an adversarial system, where the Government and Parliament take the position that credit is somehow instinctively wrong and dangerous. It is not that we must be overwhelmingly on the side of those who receive credit to the extent that those providing it feel that all their bona fides are questioned. That will not enable us to get to the heart of the matter, which is to target those who are the most dangerous to people in the poorest position.
The point of my support for the technical amendments is that it is recognised that the powers of the OFT have been significantly strengthened by the Bill, giving sweeping new opportunities for that body to declare its dissatisfaction with those who have caused harm. To redress the balance, the amendments enable the public and credit providers to have the assurance that they will specifically be involved in the consultation on the guidance to cover their industry. That should help to convince them that it is not an adversarial situation, in which they are permanently and exclusively in the dock, and should ensure that those responsible in the industry have an opportunity to ensure that rapier-like guidance goes to the heart of the problems and that those who must be caught are caught.
Much of my experience is that our constituents' problems have arisen from ambiguities or misunderstandings.
Accordingly, it is incumbent on us to ensure that all possibility of ambiguity and misunderstanding is removed. We have seen how people have been exploited if rules and wording have been unclear. Those who have power over debtors have been able to exploit that to their own advantage.
It would help if those in the business of giving credit were involved in the consultations on the Bill and on the publication of guidance. Greater involvement would prevent ambiguity and misunderstanding, and would make clearer the purpose of the Bill.
Mr Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations, Competition and Consumers), Department of Trade and Industry; Bradford South, Labour)
I thank the hon. Member for North-East Bedfordshire (Alistair Burt) for his kind comments about my footballing prowess. We were together in defeat on Monday of this week at West Ham, when the parliamentary team played a team of Holocaust survivors and their relatives. That was quite an emotional occasion, considering the commemorations that have taken place this week.
Mr Alistair Burt (Parliamentary Private Secretaries To Leader of the Opposition; North East Bedfordshire, Conservative)
It was truly an occasion when the result did not matter.
Mr Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations, Competition and Consumers), Department of Trade and Industry; Bradford South, Labour)
Indeed. The hon. Gentleman mentioned my skills in stopping shots or, more recently, my inability to stop shots, given my advancing years. I pay tribute to his skills in making runs that take people's eyes off the ball and cause defenders not to look where they should because they have been hoodwinked—I will not say by a sly one—by a wonderful run by the hon. Gentleman in the attacking position. He will understand why I do not accept the amendment so eloquently moved by him and his colleagues. However, he is right that we must achieve the best score.
Earlier, I explained in answer to a question from my hon. Friend the Member for Northampton, North how I thought the OFT would operate. I talked about the effect of the enforcement concordat on how the OFT should operate. I am not sure that the amendments would effect the change that the hon. Members for Tewkesbury and for North-East Bedfordshire want. The clause as it stands will achieve what they want, and the amendment adds little to it.
Guidance will be published to bring matters to the attention of those likely to be affected. That means that it will be available on the OFT's web site; it can also be obtained in hard copy. That allows anyone interested in or affected by the guidance to get a copy. Trade associations will also publicise the guidance to their members. I hope that the OFT will consider hon. Members' suggestions.
That goes to the heart of our discussions on the Consumer Credit White Paper and on the Bill. I have attended many meetings, as have Opposition Members, with organisations representing small and large lenders involved in the credit business.
Mr John Battle (Leeds West, Labour)
I am sure that the Minister is aware that in a research report published yesterday by Liverpool John Moores University and sponsored by the Co-operative Bank, the author, researcher Paul Jones, listed not only the usual credit companies, but also buy-back stores, cheque cashers, home credit companies, pawnbrokers, telebanks, unauthorised lenders and weekly repayment shops. A host of people massively overcharge the poor. I am not convinced by my hon. Friend's argument that it is simply a case of ambiguity. In some cases it is a deliberate attempt to get money off the poorest. Would the OFT's powers cover such businesses? If he can assure me of that I would be grateful.
Mr Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations, Competition and Consumers), Department of Trade and Industry; Bradford South, Labour)
That is my understanding. Those are the people providing credit, and it is important that the OFT's new powers are proportionate to what they achieve, and that in the preparation of the draft guidance those affected have the right to have their views taken into consideration.
The amendment does not take us any further forward, but it is right that the hon. Gentlemen put their concerns on record. When the Bill becomes law they should inform the interested parties about what needs to be done about the draft guidance. I hope that, in that spirit, they will withdraw the amendment. The amendment is not necessary, as I have explained in detail the powers of the OFT and how they will operate.
Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)
I am grateful for the Minister's explanation. I did say that mine was a technical amendment, although ''probing'' might have been a better word. I am grateful to my hon. Friend for his eloquent argument in favour of some degree of certainty that would lead to protection. I am concerned that people should contribute to the drawing up of the guidelines; not merely because I do not want the OFT to be too powerful, but because I want consumers and licensees to make a fair contribution. I am sure that the Minister will ensure that that is the case. Therefore, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 42 ordered to stand part of the Bill.
Clauses 43 to 46 ordered to stand part of the Bill.