Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations and Consumer Affairs), Department of Trade and Industry; Bradford South, Labour)

Because this is a matter of concern to the Committee, I shall explain what the clause does. It concerns the power of the OFT to impose requirements on supervisory bodies, and it enables the OFT to impose intermediate sanctions on group licence holders. Such sanctions are known as requirements. The OFT issues group licences to a particular group of persons involved in a consumer credit-related activity when it is in the public interest to do that rather than issuing many standard licences. The public interest test is usually met when those covered by the group licence undertake licensable business peripherally to their main business. For example, solicitors are covered by the Law Society group licence, and voluntary organisations by the licence of the National Association of Citizens Advice Bureaux.

In such cases, the group licence holder has a supervisory role. In effect, the OFT delegates its responsibility for checking that those covered by the group licences comply with the Act. The OFT’s role is to check that the supervisory bodies do so properly. The Bill contains a power under clause 38 for the OFT to impose requirements on licensees, as we have discussed. This power gives the OFT tools to respond proportionately to problems with a licensable business. It can impose a requirement on the licensee to do, or not to do, something if it is dissatisfied. We are trying to be consistent to ensure that the group licences are covered by this clause.

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