New clause 2 - OFT GUIDANCE
Consumer Credit Bill
6:00 pm
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.