Clause 35 - Charges for indefinite licences

Consumer Credit Bill – in a Public Bill Committee at 11:30 am on 28th June 2005.

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

Photo of Charles Hendry Charles Hendry Shadow Minister (Higher Education and Intellectual Property), Deputy Chair, Conservative Party

Can the Minister give us some additional guidance on the level of charges that he thinks likely for indefinite licences? Also, is there a right of appeal against termination? The explanatory notes state on page 19:

“Failure to pay a periodic charge in respect of a standard licence during the payment period (or extended payment period) results in the licence being terminated and details of licences terminated for this reason must be kept on OFT’s public register.”

Is there a right of appeal against that? Otherwise it would seem that the OFT has a complete decision-making authority for something on which people would have a natural right to challenge it.

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

To help the Committee I shall set out what clause 35 does. Licence applicants and licence holders will be required to pay a charge towards the cost of the functions of the OFT. The clause requires licensees to pay a periodic charge, probably every five years. The periodic charge is necessary, given the move to indefinite standard licences as the norm. The periodic charge will keep the licence current. The OFT will issue a general notice setting a level of periodic charges—that is, the notice to which I referred earlier, which hon. Members have had. It is possible that the licence charge will increase from its current level, but the approval of the Secretary of State and Her Majesty’s Treasury will be required before changes are set.

To reflect the cost of monitoring, the OFT may set licence charges according to the category or sub-category of activity that is entered into. As we said, very narrow licences may attract a reduced charge and licensing very high-risk sectors may attract a higher charge. Sometimes a licensee may not have to pay an application or maintenance charge. Licensees will be required to pay the periodic charge offsetting the OFT’s general notice before the end of their payment period. The charge level will be set out by the OFT in the general notice. That notice will be issued a specified number of days before the end of a licensee’s payment period.

The provision ensures that licensees will get sufficient notice of the level of the charge needed to maintain their licence. I said that a doubling would mean a fee in the region of £550. The payment period must apply and the specified number of days will be set by regulation. The charge, as has been said, will cover more effective monitoring of licensees, to ensure that they remain fit to hold the licence. That will include visits to business premises, where appropriate, and the OFT will be able to use additional powers that the Bill provides to investigate applicants and licensees.

There will be an appeal mechanism, through the appeal tribunal. That is why the guidance sets out clearly the steps to be taken and the time scale for notifications. That will ensure that legitimate businesses know what is expected of them in the relevant period.

Question put and agreed to.

Clause 35 ordered to stand part of the Bill.

Clauses 36 and 37 ordered to stand part of the Bill.