New Clause 5 - Regulatory impact
Consumer Credit Bill
4:45 pm
Mr Malcolm Bruce (Shadow Secretary of State for Trade & Industry, Trade & Industry; Gordon, Liberal Democrat)
Something like new clause 5 should perhaps appear in a Bill, but it is particularly important in the Consumer Credit Bill.
The Minister acknowledged on Second Reading that the Bill is setting up a mechanism, the full impact of which will not be accessible until it has been in operation for some time. New clause 5 would require the OFT to give an annual report of how it is proceeding and what impact the interpretation of the regulation is having. After five years, the Secretary of State should review not only the impact of the Act and all the regulations and activities applied by the Bill, but any European legislation that is likely to have been enacted in that period. That is in no way to undermine the Bill—quite the opposite—but to ensure that it does not lead to a layering of additional regulations and bureaucratic detail on the industry that gets in the way of the Bill's principal function. That is a matter of genuine concern.
When one talks to businesses—in this case, financial services businesses and banking businesses—they tend to be able to argue that any individual Act or regulation is probably justified and acceptable, but the cumulative effect can be substantial. That puts the onus on the Office of Fair Trading and on the Secretary of State. It does not give the industry an opportunity to set its own parameters, but it does give an undertaking that it will be reviewed, reported on annually and, over five years, it would require the Secretary of State to say that he has examined the whole impact and tried to ensure that it has been done as lightly as possible.