Charles Hendry (Shadow Minister, Trade & Industry; Wealden, Conservative)

I beg to move, That the clause be read a Second Time.

The new clause relates to the OFT's general duties. On Second Reading, hon. Members of all parties expressed concern about the wide and open powers provided to the OFT in the Bill. The OFT has scope to discharge those powers, and to regulate the conduct of licensees practically unfettered, as we have discussed. It is given a free rein to impose requirements and penalties based entirely on loose concepts of unacceptable conduct. What the OFT says is what goes. With such wide-ranging powers, it is striking that the Bill contains no provision specifying the objectives and purposes towards which the OFT must act, particularly in a Bill that sets out to achieve so much.  

By introducing an objects clause, new clause 1 provides an important means of ensuring that the Bill achieves the purposes that Parliament has in mind. It is also a vital means of maintaining parliamentary control over the OFT—again, something that is distinctly lacking in the Bill. There is no good reason why such provision should not be included in the Bill. Indeed, it is invariably the case that Parliament controls the exercise of the discretion enjoyed by a regulatory body. The Financial Services and Markets Act 2000 is perhaps the best example. In the opening sections, the ground rules with which the Financial Services Authority has to comply are made clear.

I challenge the Minister to give a single suitable reason why the OFT should not be subject to the same control in this Bill. Surely the interests of consumers will be better protected if the body that seeks to protect them is clear about what it is trying to achieve. The dangerous alternative is to leave the OFT to make things up as it goes along. That is not good regulation, and could be immensely damaging for consumers. Such a provision would also ensure that the industry was much clearer about what was expected of it by the OFT. At present, that clarity is not there.

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

The hon. Member for Wealden is less vociferous in his opposition to the OFT than was the hon. Member for Hornchurch, who spoke from the Front Benches on the last occasion on which we discussed the matter. His hon. Friend was concerned because anything to do with the OFT excited his well-known interest in horse racing and the OFT's deliberations to that effect, to the point at which his opposition to the OFT became almost obsessive.

As I reminded the hon. Member for Hornchurch this morning, hon. Members would do well to look at the Enterprise Act 2002 and the Competition Act 1998 with regard to the need to separate Ministers from interfering in markets that are performing well. It is right that we set the framework, and I do not believe that the OFT is completely unfettered, as the hon. Member for Wealden suggests. The way the OFT should act with regard to its consumer credit functions is set out in sections 1 to 5 of the 1974 Act. That includes keeping under review both the Act and the relevant social and commercial developments; enforcement and working of the Act; production of information; advice; and annual reporting obligations on the operation of the Act.

The provisions of the Bill should be read in conjunction with the provisions of the Enterprise Act 2002 relating to corporate governance and the OFT board requirement for annual reports. The OFT's general functions are set out in sections 1 to 8 of that Act. The ground rules for the operation of the OFT were laid down when Parliament debated the 2002 Act. The OFT is subject to the usual range of accountability measures, such as scrutiny and appearance before Committees of the House. In addition, as a signatory to the Cabinet Office enforcement concordat, it is under an obligation to act proportionately. It is committed to minimising the cost of compliance for business by ensuring that any action that it requires is proportionate to the risk, and   by taking into account the circumstances and the attitude of the operator.

The OFT is, therefore, already required to do what is required by the new clause. I hope that, having heard that explanation, the hon. Gentleman will withdraw the new clause—unless he, too, has an obsession about the powers of the OFT going too far.

Charles Hendry (Shadow Minister, Trade & Industry; Wealden, Conservative)

The Minister should be well aware that the modern Tory party has nothing to do with obsession. We have moved on. Many of us here are so modern that if it were not for our respect for the Chair, we would not be wearing ties, and the suggestion that we have obsessions is simply out of date. I understand where the Minister is coming from—he is heading in the right direction. However, at this stage we are clearly not going to get the degree of clarity that we seek. There is a case for the new clause; I shall not push the matter to a vote, but perhaps the issue could be reviewed further in light of their lordships' experience when the Bill goes to another place. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.