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

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

The Minister and I could almost swap places, as we know each other's phrases so well. I am sure he will know where I am coming from on new clause 2. He has stressed time and again that improving transparency is one of the fundamental aspects of the Bill. We all support that aim, but certain aspects of the Bill will not achieve it; indeed, some will serve only to blur the legal situation.

Far too many significant policy areas have been left to secondary legislation and guidance from the Office of Fair Trading. That not only creates uncertainty for consumers, businesses and enforcers but means that Parliament does not have the opportunity to consider vital detail that is relevant to the Bill. That issue was raised many times on Second Reading and has been raised many times in Committee.

As drafted, the detail of key features of the Bill has been left to be developed by the OFT, which is an agency over which the Government have no ministerial control and which operates as the regulator in its area. The result is that the OFT could become both judge and jury. That is bad legislation and not how we should move forward in trying to protect consumers. Instead, we should try to ensure the transparency that the Minister said that he wants.  

The new clause will achieve just that, by requiring approval from the Secretary of State before OFT guidance is published and requiring the OFT to consult relevant stakeholders on the content of that guidance. That builds in essential safeguards, by enabling the Secretary of State to ensure that the OFT acts in accordance with Parliament's wishes, while not interfering with the detail of that work, and ensures that those affected have the chance to influence the OFT's direction before it is set in stone.

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

The new clause undermines the independence that Parliament gave to the OFT under the Enterprise Act 2002. When that Act was passed, Parliament concluded that the OFT should be independent of the Government and exercise its functions independently of Ministers. To that end, it was constituted as a non-ministerial department, under the control of a chairman and a board.

The new clause goes against that approach and would require the OFT to submit its guidance on issues under the legislation to Ministers for their approval. That would mean that the OFT would no longer be independent and that, before it could publish documents, it would have to obtain ministerial clearance indicating how it could enforce consumer credit legislation and which issues it could take into account when doing so. The OFT would no longer be a regulator independent of the Government.

The only aspect of the legislation that requires the OFT to obtain ministerial clearance concerns the statement of policy in relation to civil penalties. That is a special case, which allows the OFT to impose fines for breaches under the licensing regime. That goes beyond the OFT's normal role as a market regulator. The other guidance provided for by the legislation is not the same, and nor is the requirement made in respect of the guidance provided for in the Enterprise Act 2002.

Proposed new section 183A(2) in new clause 2 permits the OFT to consult such persons as it thinks fit when preparing guidance. The proposal is unnecessary, because the relevant provisions of the Bill and the Enterprise Act concerning unfair relationships already require the OFT to consult on the guidance. In light of that information, I hope that the hon. Gentleman will withdraw the motion.

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

I am grateful to the Minister that it is clear where his thought processes are going. He is not prepared to shift, but we have made the point. In the light of that I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.