Consumer Credit Bill – in a Public Bill Committee at 10:00 am on 27 January 2005.

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Question proposed, That the clause stand part of the Bill.

Photo of Laurence Robertson Laurence Robertson Shadow Minister (Treasury) 10:15, 27 January 2005

Clause 48 deals with entry into premises under warrant. Clause 47 gives the OFT the power to require access to premises, but I presume that clause 48 is subsequent to that should the OFT be refused that entry. However, if the OFT has the legal power to enter premises, does it not naturally flow that   it should be granted a warrant to enter should entry be refused? I wonder whether we are going a little too far.

I understand that there is a need to gather information in order to protect consumers, but would it not be better to allow the courts to draw an inference from a refusal to allow entry, rather than to give them the power to grant a warrant? If some of the wording of the clause had been different, I might not have wished to speak about it. For example, proposed new section 36D(3) states that a warrant gives an officer the right

''(a) to enter the premises specified in the warrant;

(b) to search the premises and to seize and detain any information or documents appearing to be information or documents specified in the warrant or information or documents of a description so specified''.

If the court has such a degree of detail, is there a need to enter the premises in the first instance? It also provides for the power

''to use such force as may be reasonably necessary.''

That alarms me. It is not clear who is allowed to use such force. Is it an officer of the OFT?

Perhaps I am getting into an area that I do not quite understand, but the wording in the Bill on the right to obtain a warrant and to enter premises alarms me. I wonder whether such officers will be of a certain description or given a certain legal right. I am troubled by that, and before accepting the clause, I would like an explanation of why it is felt that the courts should be able to issue such a warrant and, more particularly, why there is a need for some of the wording in the Bill.

Photo of Alistair Burt Alistair Burt Parliamentary Private Secretaries To Leader of the Opposition

I wish to reinforce the concerns raised by my hon. Friend. This issue represents another example of the extension of powers. With regard to my earlier question, if the information is not available to the Committee today, perhaps the Minister could write to Committee members. What circumstances have arisen regarding the supervisory authorities so that they now require such powers? Are there occasions when the authorities have been convinced that some irregularity exists, when information was available that would help in the pursuance of a case against someone whom they wished to charge under this or a similar Act, and they simply failed to obtain it because they were not quick enough or because the process of discovery through civil proceedings did not bring that information to light? This is quite heavy stuff.

None of us would resist giving the authorities the ability to acquire information in circumstances where people have been badly let down or are being adversely affected by the inappropriate activities of those who, alas, sometimes operate in the industry. However, the powers are very extensive; people with a warrant will be able to knock on doors, enter premises and seize whatever they choose. If the powers are justified, my concern is to establish where the need has, technically, come from. What have the authorities said to the Government to show that they need extra powers in addition to those that they already possess? In the general context of the Bill, it would be helpful—bearing in mind the powers that we are seeking to exercise on behalf of consumers, who are the worst hit   when things go wrong—if some evidence could be given as to why such sweeping powers are necessary.

Photo of Gerry Sutcliffe Gerry Sutcliffe Parliamentary Under-Secretary (Trade and Industry) (Employment Relations and Consumer Affairs)

I agree with the hon. Member for North East Bedfordshire that it might be worthwhile to write to Committee Members to set out the reasons for the powers. I shall try to deal with that matter, but to reassure hon. Members, it may be better to provide a more detailed written explanation of why it is important to provide for such powers.

The powers will be invoked only once the proper procedure has been exhausted, and the authorities have failed to gain access via their existing powers. The clause addresses the circumstances in which an enforcement officer can enter premises with a warrant obtained by the OFT and the procedure required for that. Under certain circumstances, the OFT may apply to a justice of the peace for a warrant to search premises. That justice of the peace must be convinced that such action is reasonable. In Scotland, applications must be made to a sheriff. The OFT must have reasonable grounds to believe that there is information on those premises that is required under section 36B. The OFT must also have reasonable grounds to believe that if a requirement to provide information were imposed, it would not be complied with or the documents or information in question would be tampered with. Most people will act reasonably in those situations.

Many hon. Members have mentioned loan sharks and disreputable people. The provisions concern linkage to the licensing regimes. It might be that reasonable force applies to opening a locked cupboard where information is stored. The officer responsible for carrying out the warrant could enter and search the premises. He can seize and detain any information or documents of the description specified in the warrant. The officer would then be able to act to secure the protection of the information or documents and prevent interference with them. Those powers are subject to the definition of reasonable force, which applies to other powers in the Enterprise and Competition Acts.

Photo of Laurence Robertson Laurence Robertson Shadow Minister (Treasury)

I appreciate the Minister's attempt to define reasonable force, which could simply mean breaking open a locked cupboard, but it could also mean much more. If I may draw an analogy, we had a spirited debate recently in Parliament about the use of reasonable force to protect one's home, and there is much uncertainty about what that term means. It troubles me that reasonable force may include much more than breaking open a locked cupboard. I am concerned about giving that degree of power, which ordinarily is given only to police officers—who are directly accountable—for entering premises. What grade of officer will be given the power to use reasonable force? I am very troubled by subsection (3)(d), and I ask the Minister whether he is prepared to reconsider it.

Photo of Gerry Sutcliffe Gerry Sutcliffe Parliamentary Under-Secretary (Trade and Industry) (Employment Relations and Consumer Affairs)

The short answer is no. That is not being unreasonable because the powers are commensurate with our goals. The hon. Member for Richmond Park (Dr. Tonge) spoke earlier about prevention being a good cure—to ensure that things do not happen. When I mentioned the powers of the   Enterprise and Competition Acts, I was referring to cartels. Those are the same powers that we have included in the clause. The OFT must have reasonable grounds; it must convince the legal jurisdiction that it has reasonable grounds; and it must operate—as was mentioned during the debate on an earlier clause—in a professional and reasonable manner. I reassure hon. Members that that was my thinking when I set out the written conditions and situations.

I worry about the hon. Member for Tewkesbury's concerns over the powers of the OFT, which are probably creating an imbalance in his thought patterns. I do not mean that discourteously, although it may sound that way. It is a safeguard that all reasonable steps to get to that position are being taken. Licensees who give credit to people who, in certain circumstances, would be very vulnerable must be given the proper opportunity to gain information that is required to ascertain whether those people are fit borrowers. OFT staff are also told that force can never be used against people. That should reassure hon. Members.

Photo of Alistair Burt Alistair Burt Parliamentary Private Secretaries To Leader of the Opposition

What would happen if someone were to stand in front of the cupboard?

Photo of Gerry Sutcliffe Gerry Sutcliffe Parliamentary Under-Secretary (Trade and Industry) (Employment Relations and Consumer Affairs)

If an illegal use of force were an issue, there are other mechanisms, such as phoning the police or asking OFT officers for assistance. Through a series of reasonable processes that are designed to elicit information, people will have been asked to do the right thing. However, a consumer could have been seriously harmed, and we must ensure that the OFT has the necessary powers. It could be that groups of people—cartels—may be operating in tandem to damage consumers, and legislative powers already exist relating to cartels.

I acknowledge the views of the hon. Members for Tewkesbury and for North-East Bedfordshire, but they may be overplaying the issue, albeit in the right way. Sufficient safeguards are in place. I shall write to the Committee and give details about situations in which these powers will be used.

Photo of Laurence Robertson Laurence Robertson Shadow Minister (Treasury)

I am sorry if the Minister thinks that I have become unbalanced. I assure him that I am not unbalanced—not in this instance anyway.

Proposed new section 36D(3)(b) states that the warrant gives the right

''to search the premises and to seize and detain any information . . . specified in the warrant''.

Therefore courts are already aware of the documents that are required. In a short but telling intervention, my hon. Friend the Member for North-East Bedfordshire highlighted the uncertain nature of subsection (3)(d). What happens if a licensee stands in front of a cupboard or at a front door? The Minister tells us that force cannot be used against that person. Courts know what documents are required, and given that it is normal practice for them to call for documents, would it not be better to do that when the case comes to court?

Photo of Gerry Sutcliffe Gerry Sutcliffe Parliamentary Under-Secretary (Trade and Industry) (Employment Relations and Consumer Affairs)

That would complicate the situation unnecessarily. OFT officers are bound to act reasonably and professionally, so there are   safeguards. The OFT must convince the court about the reasonableness of the request for information. People must be protected from rogues.

Photo of Sally Keeble Sally Keeble Labour, Northampton North

How would my hon. Friend rate the chances of an incriminating document that is held by a loan shark lasting long enough to be used in a court case? I would rate the chances at zero.

Photo of Gerry Sutcliffe Gerry Sutcliffe Parliamentary Under-Secretary (Trade and Industry) (Employment Relations and Consumer Affairs)

My hon. Friend may be right, and that explains why the OFT should have those powers. I have tried to describe the circumstances, and I have offered to write to the Committee giving further details. I have acted as reasonably and professionally as possible.

Photo of Alistair Burt Alistair Burt Parliamentary Private Secretaries To Leader of the Opposition

I acknowledge the perfect good sense of the hon. Member for Northampton, North. However, the same worries would apply when a warrant application was made. If a rogue had received a series of written applications requesting information and had refused to co-operate, documents could still go missing. As the hon. Lady said, people who do not wish to comply will take steps to remove incriminating evidence. That could apply at any stage in the process, and documents may have disappeared by the time the application is made. My hon. Friend the Member for Tewkesbury and I recognise that there are powers to catch rogues, but we want to ensure that the right people are targeted. Powers should not be so sweeping that innocent people are affected. The law should not be brought into disrepute by using the over-powerful arm of the state in the wrong context.

Photo of Gerry Sutcliffe Gerry Sutcliffe Parliamentary Under-Secretary (Trade and Industry) (Employment Relations and Consumer Affairs) 10:30, 27 January 2005

This is not about an over-powerful state. This is about achieving a necessary balance; it is about protecting documents that could be tampered with, even though those documents may be destroyed. Hon. Members are right to have probed me. My powers of eloquence will either persuade them or otherwise on this matter, and I hope that the Committee will support the clause.

Question put and agreed to.

Clause 48 ordered to stand part of the Bill.

Clauses 49 and 50 ordered to stand part of the Bill.