I beg to move amendment No. 39, in clause 53, page 43, line 41, leave out 'and'.

With this it will be convenient to discuss amendment No. 40, in clause 53, page 44, line 3, at end insert

'; and informing him of his right of appeal against this penalty.'.

Proposed new section 39B states:

''(1) Before determining to impose a penalty on a person under section 39A the OFT shall give a notice to that person—

(a) informing him that it is minded to impose a penalty on him;

(b) setting out its reasons for being so minded;

(c) stating the proposed amount of the penalty;

(d) setting out its reasons for proposing that amount;

(e) setting out the proposed period for the payment of the penalty; and

(f) inviting him to submit representations to it about the matters mentioned in the preceding paragraphs in accordance with section 34.''

The OFT's notice would be a standard document and would be easy to put together, so the OFT should be obliged to notify the licensee about his right of appeal. I previously asked about the right of appeal, and the Minister said that he would write to me. I do not mean to be pedantic.

That is my fault; I was not clear. The hon. Gentleman is correct. The consumer credit appeals tribunal under clause 55 provides the appeals mechanism. The tribunal will consider credit appeals. I hope that that helps, but I shall write to the hon. Gentleman to clarify things.

I am grateful to the Minister for that helpful introduction, and I would appreciate a more detailed explanation of how things work. I am a little concerned that the Bill is not as clear as it could be, but I am straying into discussion of an amendment that I did not table.

The amendments that I have tabled would require the OFT to clarify the right of appeal. The rather uncertain discussion between the Minister and me suggests that that is not entirely clear. I ask the Committee to require the OFT to notify a person of his right of appeal against the imposition of a civil penalty. The OFT is already required, rightly, to give   details about a penalty that it is minded to impose, and it is not unreasonable to ask it to set out the right of appeal. It follows naturally from what is already in the Bill.

That was a valiant attempt to persuade me to agree to the amendment. I hope that the uncertainty about the right of appeal has been addressed. The hon. Gentleman rightly said that clause 53 sets out the procedure that the OFT must follow in order to impose a civil penalty, and lists what should be included in the OFT's notice to inform a person that it is so minded. Amendment No. 39 is not necessary, and its intention is unclear. As far as I can see, it simply deletes the word ''and'' in the list that appears in clause 53.

Amendment No. 40 proposes that the notice should include a statement that a civil penalty can be appealed. That is not needed; the Consumer Credit Licensing (Representations) Order 1976 sets out what a notice from the OFT of a proposed determination should include, and it stipulates that the right of appeal should be drawn to the attention of the person or persons affected. That statutory instrument will be amended so that it refers to the new tribunal, rather than to the Secretary of State, and it will cover the new determinations provided for in the Bill, such as the power to impose a civil penalty. The current appeal regulations oblige the OFT to send a form that can be used to make that appeal when it gives a clear notice of determination. In future, the Department for Constitutional Affairs will provide a notice of appeal.

I would like the Minister to clarify something that he said about the requirement to notify a person of the right of appeal being in another Act. I hope that I am not misleading the Committee, but I am unsure how the consumer credit appeals tribunal could require the OFT to inform a person of that right, when it was not in existence at the time of that Act.

The appeals mechanism came into existence in the Consumer Credit Act 1974. The provision that the hon. Gentleman requires is covered by the Consumer Credit Licensing (Representations) Order 1976, which sets out what is required by the OFT. The difference will be that we take out the words ''Secretary of State'' and insert the words ''new tribunal''. I ask that he withdraw the amendments.

Okay, but—[Laughter.]

Look behind you.

I have been in many small minorities during Divisions of the House of Commons, but a minority of one or two is perhaps going a bit far. I am still a little concerned about the Minister's explanation in as much as the Bill sets out several requirements of the OFT. It would not be over-onerous to set out that final paragraph. It would be a standard document and, in the interests of consolidation and clarification, I do not see that there is a problem.

It must be done under the provisions of the 1976 Order. It is unnecessary to reinsert it; it is already there.  

I am happy to accept the Minister's assurance. I wonder whether any of the other matters are set out in other legislation, and, if so, why they are repeated. Perhaps that stretches the point a little too far. [Interruption.] Even though reinforcements have arrived behind me, I shall not press this matter to a Division. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment No. 41, in clause 53, page 44, line 11, at end insert—

'(c) the effect such a penalty will have on the ability of the person to continue to run the business.'.

Clause 53 deals with penalties that may be imposed by the OFT. Subsections (2), (2)(a) and (2)(b) state that

''the OFT shall have regard (amongst other things) to . . . any penalty or fine that has been imposed on that person by another body in relation to the conduct . . . other steps that the OFT has taken or might take under this Part in relation to that conduct.''

I wonder whether it is necessary—it may not be, because the original wording says ''amongst other things''—for the OFT to take into account the continuing ability of the person to run that business. For example, a court could consider whether removing someone's driving licence might be too drastic a measure. If it means that that person could not earn a living, the court might reduce the sentence.

That brings to mind what the Liberal Democrat spokesman, the hon. Member for Gordon, said about the OFT being neither one thing nor the other. I accept that it can do some things, such as making companies change their conduct. However, the OFT should be able to take account of a company's circumstances in relation to fines. It may not want to impose a heavy fine that could put a company out of business or make it unable to carry on its business. Perhaps that should appear on the face of the Bill.

The amendment gives me an opportunity to reassure the hon. Gentleman and to explain the process for civil penalties. I hope that he will understand why his amendment is unnecessary.

To reiterate the point made by the hon. Member for Gordon, there are three positions. The OFT requires the licensee to change their behaviour in order to avoid any further licensing action; that acts as an incentive for the licensee to improve. These are the requirements: at the penalty stage, a sum of up to £50,000 is in place; if that penalty does not work, there is a sanction to withdraw the licence. The OFT would take into account the impact of a civil penalty when a licensee's ability to run a business was being assessed. Reputable businesses that comply with requirements have nothing to fear; penalties will be imposed only when requirements are breached.

The philosophy is that if a business is not operated properly, requirements will encourage a change of behaviour. If that does not work, penalties will come into play. If penalties do not work, the ultimate sanction is there. Those are reasonable processes, and appeal mechanisms are also in place, and those measures are set out on the face of the Bill. Given my explanation, I hope that the hon. Gentleman will withdraw his amendment.  

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 53 ordered to stand part of the Bill.