Clause 46 - Power of OFT to require information generally
Consumer Credit Bill
12:00 pm
Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations and Consumer Affairs), Department of Trade and Industry; Bradford South, Labour)
The clause is key to ensuring that the OFT has sufficient powers to gather information so as better to monitor and enforce the licensing regime. The clause enables the OFT to require a person to provide specified information and documents at a specified time and place.
The OFT must give reasons for requiring the information and documents. It would be able to require such information or documents only if they were reasonably required for the exercise of the OFT’s functions under the legislation to undertake routine monitoring of licensees.
The OFT may also require information from third parties. To protect such third parties, the clause contains safeguards. The OFT can request information from non-licence holders only if certain acts or omissions have occurred, or if it believes that certain events have occurred. Such events must cast doubt on the fitness of a licensee, lead to a requirement being placed on the licensee or trigger a civil penalty. In the case of a group licence, the OFT must consider events that prompt questions as to whether the public interest is best served by the group licence remaining in place. Such requested information must also be reasonably required by the OFT to help it carry out its duties under the Bill. The clause ensures that there are adequate procedural safeguards for third parties.
Charles Hendry (Shadow Minister, Trade & Industry; Wealden, Conservative)
The way in which the OFT will interpret its regulatory role and carry out its powers in practice remains relatively vague in many areas, despite the additional guidance. For example, the OFT guidance states:
“From time to time the OFT may publish guidance on its interpretation of aspects of the Act and how it will enforce these. In some circumstances guidance is required by legislation...In other instances, OFT has the power to issue such guidance as it thinks appropriate. Guidance may be of a general nature...or it may relate to particular categories of activities or business.”
The extent to which and the circumstances by which the OFT will enforce its powers remains unclear. This is unhelpful both to the industry and to consumers and I should be grateful if the Minister clarified that. I should also be grateful if he talked further about the role of trading standards services because their duties will, to some extent, be carried out on behalf of the OFT. Does the Minister believe that trading standards services have the capacity to cope with their new work load? Will they be able to carry that out effectively and efficiently to fulfil the Bill’s commitment to improve the licensing and regulatory regime and to sift out unscrupulous lenders and those operating bad practice?
Can the Minister also clarify what additional resources will be made available to trading standards services? We need further assurances on that, despite his earlier comments. Does he accept that the delegation of responsibilities from the OFT to trading standards services will inevitably dilute accountability? That will run contrary to the Bill’s aim of improving transparency and will prove detrimental to consumers.
Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations and Consumer Affairs), Department of Trade and Industry; Bradford South, Labour)
We shall come to the enforcement of the powers and the effect on trading standards services when we discuss clause 49, so it might be more appropriate to deal with that matter then.
Throughout our discussion, the hon. Gentleman has made the charge that the Bill is vague, but he will accept that under the parliamentary process the Bill sets out the framework and follows a White Paper that has been consulted on with all stakeholders. Discussion of the details takes place in relation to secondary legislation and guidance. That is necessary to enable people to understand fully the implications of the Bill.
That is how the details will be looked at. That will take place as soon as possible after the Bill receives Royal Assent. I accept that the hon. Gentleman feels that many aspects of the Bill are vague, but that is usually because of the parliamentary process that has stood us in good stead in much of the legislation that has been introduced. Secondary legislation covers the details and there is a great deal of negotiation before that secondary legislation is introduced. I hope that he will accept that explanation and my assurance that we will discuss the issues involving trading standards services and so on when we come to clause 49.