Part of Consumer Credit Bill – in a Public Bill Committee at 9:45 am on 27 January 2005.

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Photo of Gerry Sutcliffe Gerry Sutcliffe Parliamentary Under-Secretary (Trade and Industry) (Employment Relations and Consumer Affairs) 9:45, 27 January 2005

I shall come to that matter. It is worthwhile going through the clause before I come to that point.

The clause provides that the OFT may impose requirements on licensees if it is dissatisfied with a matter related to the business. Requirement takes the form of a notice requiring the licensee to do, not to do, or to cease doing something. That must relate to a licensable business. The requirement must also address the matter with which the OFT is dissatisfied, or it must ensure that the stated problem—or a similar one—does not arise. The OFT could use that power to address a wide range of problems.

Certain employees may have problems explaining credit agreements to customers, so a requirement for training employees could be imposed. That might provide that sales representatives in a named branch are trained to inform consumers of how they can cancel their agreements. For debt collectors whose employees unfairly pressurise consumers by calling very late at night, there may be a requirement to stipulate that they should only call between 8 am and 8 pm. A requirement may also refer to a person other than the licensee: for example, employees such as those in the examples I have just used. However, the requirement would be addressed to, and be binding on, the licensee, and it could require a particular person not to undertake a specific activity, such as collecting debt in person.

The OFT may take steps to impose a requirement alongside the application process, so that it will bite as soon as the license is issued. That also explains why the clause refers to proposals to carry on a business as well as to a business that already exists. Therefore requirements are vital new tools for the OFT in   encouraging a targeted and, I stress, proportionate licensing regime.

Returning to my hon. Friend's point, the OFT will publish the draft guidance on its website after the Bill has been passed. That guidance will be similar to the OFT's notes on requirements, which have already been provided to the Committee. The OFT will also send out the draft to interested parties, such as trade associations, consumer organisations and many other bodies that my hon. Friend will recognise as having been heavily involved in the consultation on the White Paper and the Bill. I am confident, therefore, that those who want to take a view on those drafts will be able to do so. That consultation will be in accordance with Cabinet Office guidelines, and there will be at least 12 weeks for comments. The OFT will be able to speak to people who have queries, so there will be opportunity for great debate.

The OFT will then take on board those comments and will publish the final version of the guidance. It will be able to justify why it has come to a particular conclusion. The OFT will also have the power to amend the guidance. Therefore if, following publication, it became evident that clarification were needed, the OFT could make that change.

Those safeguards are sufficient to allow the guidelines to be challenged and for consultation to have taken place. I resist again the temptation into which my hon. Friend has dragged me. I will neither decry nor describe unfairness. The Committee did so quite eloquently on Tuesday.

I hope that having heard the explanations, hon. Members will accept the clause.

Question put and agreed to.

Clause 38 ordered to stand part of the Bill.

Clauses 39 to 41 ordered to stand part of the Bill.