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

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Photo of Sally Keeble Sally Keeble Labour, Northampton North 9:25, 27 January 2005

Welcome to the Chair, Mr. Benton. Will my hon. Friend the Minister clarify some issues concerning the workings of the clause, which is part of the section on the further powers of the OFT to regulate the conduct of licensees? I speak from two points of view. First, like other hon. Members I have many constituents who come to me about debt problems. I have seen the difficulties that people face when they get into unreasonable debt or have agreed to completely unreasonable terms because they have borrowed from loan sharks. Secondly, some financial services are available in my constituency, so I have also seen some good practice, and I hope that, through this legislation, that good practice will be extended.

I want to raise some questions about this clause in particular, because it obviously provides extensive powers to the OFT without completely defining all the terms. The last debate made that clear. On Tuesday, the Committee debated the subject of unfair relationships at some length. I completely understand why my hon. Friend did not define the terms of that, because that is down to interpretation and for the courts to decide. However, in agreeing clause 38 and later clauses, we are providing sweeping powers to the OFT without allowing for further scrutiny.

Often in such circumstances there would be secondary legislation, and we could examine the workings of the provisions in more detail. Legislation does not always work in practice, so the details are important. There is a general consensus that when legislation is passed before a general election, proper examination of the details is under pressure of time constraints. How does my hon. Friend expect the OFT to proceed under the provisions of this and other clauses? What discussions does he expect the OFT to hold with the financial services industry, which employs good practice in dealing with debt advice agencies—which have a particular interest in these matters—and with MPs, who may have strong views about how the powers should be applied? Could the Minister clarify the process, including the factors the OFT might be expected to take into account; how that body should consult before reaching a decision on an unfair relationship; and how it can meet and implement the requirements of the clause?