Clause 54 - Statement of policy in relation to civil penalties

Consumer Credit Bill – in a Public Bill Committee at 4:45 pm on 28th June 2005.

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

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

Clause 52 means that licence holders who do not comply with requirements placed on them   by the OFT will face civil penalties. Clause 54 requires the OFT to prepare and publish a statement of policy, setting out how it will impose those penalties and the determination of amounts. The statement must be approved by the Secretary of State before it can be published and before any penalties can be imposed. The OFT must publish the statement, so that it comes to the attention of the people who might be affected. The clause requires the OFT to consult interested parties on the preparation or revision of the statement, and the OFT must publish the most recent version.

The clause means that the OFT must also have regard to the statement of policy when issuing penalties. It prevents the OFT from issuing a penalty to a licensee before the statement is published.

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

The guidance note from the OFT states that the draft Bill requires that as soon as practicable after the commencement of the relevant provisions the OFT will prepare and publish a statement of policy on the imposition of penalties under proposed new section 39A of the Consumer Credit Act 1974 and the determination of the amount of such penalties. When does the Minister envisage that that will be published? Clearly, the question of when is as soon as practicable and will be a matter of importance to those people who need to understand the full force of the Bill before they can comply with it.

How often would the Minister expect the statement of policy to be revised, and how would he expect it to be publicised? Would it be sufficient for revisions to be sent to all licensees, or would an advertisement have to be put in certain publications? Would further action be needed to ensure that those who needed to know of changes were informed about them?

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

This morning we became involved in definitions of reasonableness, responsibleness and unfairness. I should hope that the OFT would operate within its service agreements to get the required information speedily to the relevant stakeholders. There would be an onus on it to do so, because it could not impose penalties unless it had done so; it would be in its interest to do it, in so far as it was reasonably practicable. It would be done in the same way as the OFT operates when it ensures that stakeholders are made aware of the variety of methods of regulation and development.

I hope that the hon. Gentleman will accept that, and understand why the statement is necessary. All applicants will have the statement brought to their attention, and it will be available through the OFT website. I am sure that the hon. Gentleman will be pleased about that. The OFT will undertake publicity before the new provisions come into force, so that existing licensees will understand the new provisions and know where to find out more. They will be revised when necessary.

Question put and agreed to.

Clause 54 ordered to stand part of the Bill.