Clause 38 - POWER OF OFT TO IMPOSE

Part of Consumer Credit Bill – in a Public Bill Committee at 9:25 am on 27 January 2005.

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Photo of Laurence Robertson Laurence Robertson Shadow Minister (Treasury) 9:25, 27 January 2005

I beg to move amendment No. 46, in clause 38, page 30, line 30, leave out from first 'licensee' to end of line.

The clause gives power to the OFT to impose requirements on licensees. Proposed new section 33A(1)(a) will apply when the OFT is dissatisfied with any matter that is in connection with—

''a business being carried on, or which has been carried on, by a licensee or''— this is the crucial bit—

''by an associate or a former associate of a licensee.''

The implication is that if the behaviour of a former associate of a licensee has been inappropriate, the OFT can impose requirements and either rescind a licence or not grant it. That is possibly unfair and rather open   ended. If by ''former associate'' is meant one who was an associate a month ago, the OFT probably has a right and a duty to investigate the relationship and perhaps to act on it. However, if an association ended a year, two years or five years ago, should the OFT still be required to investigate it? Should the OFT be given the same power to rescind the licence because of a relationship that existed a long time ago?

I raised a point at our last sitting on clause 29(2A)(d) at the last sitting, which sets out some of the criteria for deciding whether people are fit to hold licences. One example that the OFT was considering was somebody who has practised discrimination on grounds of sex, colour, race or ethnic or national origin and so on. That is an all-encompassing subsection, and at the last sitting, I condemned such behaviour; however, I did not see the relevance of the provision.

Under this clause, not only could the licensee be held responsible for any malpractice in that sense, but it seems that his former associates could also be held responsible. Again, I am concerned about the power of the OFT in that regard, especially when the clause and subsection seem rather vague and open ended. I would appreciate the Minister's explanation as to why that particular wording is in the Bill. It is not the only instance of it, but this is probably where it is of most concern.