Clause 30 - Guidance on fitness test
Consumer Credit Bill
10:45 am
Michael Jabez Foster (Hastings and Rye, Labour)
I very much support the principle behind the amendment tabled by my right hon. Friend the Member for Leeds, West. I seek the Minister’s view about how he could, if not accept the amendment, provide for the balance of responsibility that must form the basis of any credit agreement. As we discussed during our debate about clause 19, some of us believe that that clause may be the place for a definition of an unfair agreement or relationship in a form that we understand, without having to leave matters to the judges. That debate has passed, so if we could deliver something at this stage, it would provide guidance about what is an unfair deal. If a creditor lends irresponsibly, that in itself is an unfair relationship and should be taken into account.
I want to press further the point that my right hon. Friend made about the inability of the courts to mitigate situations in which over-lending has occurred. Cases that finish up in the county court frequently mitigate the repayments and, indeed, the very small repayments often made after taking full account of the debtor’s means. However, the nature of those debts is that often they do not reach the courts and for that reason, it is important to provide some sort of fairness for people at that stage.
If the amendment is not acceptable to the Government, I hope that an alternative will be in place to introduce to the legislation the principle of responsibility on the part of the lender.