New clause 1 - OFT'S GENERAL DUTIES
Consumer Credit Bill
5:45 pm
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.