New clause 4 - CHANGES IN CREDIT LIMITS
Consumer Credit Bill
6:15 pm
Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations and Consumer Affairs), Department of Trade and Industry; Bradford South, Labour)
It is appropriate that we end our deliberations on new clause 4. I thank the hon. Member for Wealden for drawing the attention of the Committee to this important issue. I know where he is coming from and where he intended to go, but he went too far, I am afraid. The new clause goes beyond prohibiting unsolicited increases and also bans solicited requests for increases not made in writing.
As for the sentiment underlying the amendment, the concern expressed by the hon. Gentleman is not new, as he says. Unsolicited credit limit increases have been an issue of concern for some time. During the last Parliament, the Treasury Select Committee examined the issue in some detail and expressed its concern, and businesses undertook to improve the processes through self-regulation.
As the hon. Gentleman said, the industry has done much through improvements to the banking code to improve the processes through which credit limit increases are made. The changes were included in the new version of the code, published in March. At the time the Government welcomed the new guidelines, as did the Committee. We look forward to seeing the industry's response to the Committee's recommendation to restrict unsolicited increases in credit limits.
The Government welcome effective self-regulation by business when it improves the quality of business practices, serves to protect consumers and enhances the services that they receive. Effective self-regulation is as critical to the proper functioning of the market as formal regulation through legislation. The industry is on notice on the matter, and we look forward to its taking an effective approach to address the concerns expressed by hon. Members, which have existed for some time.