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Mr. Sutcliffe: My hon. Friend is right; all hon. Members will be aware of such cases. On the question of the £50,000 fine, there are issues relating to licensing regimes and the powers of the Office of Fair Trading, and a balanced approach must be taken. If my hon. Friend is lucky enough to serve on the Standing Committee, she will be able to probe and develop some of the reasons why the figure was set at that amount. There is a serious point relating to that, and I shall return to it in more detail if time permits.

We need to work with consumers. We also need to work with the industry to produce this legislation, to ensure that, together, the Government and the industry can provide information so that people can make informed choices and, more importantly, get help when things go wrong. We must also work with the regulators as well as legislating for them, to ensure that they have better, more appropriate powers to obtain information. That is what we are doing.

A good example of that is the cross-government strategy to tackle over-indebtedness. "Tackling Over-indebtedness—Action Plan 2004" sets out seven strategic priorities, and the 10 partnership priorities necessary to achieve them. The Government are working in partnership with consumer bodies, the credit industry, regulators, the voluntary sector and academia to address this problem. We are working together to increase the availability of affordable credit for vulnerable consumers, particularly those on low incomes; to ensure that timely and appropriate free debt advice is available for those who need it; and to improve the financial capability of consumers to ensure that they can make informed decisions about their borrowing.

Mr. Clive Betts (Sheffield, Attercliffe) (Lab): On the question of informed decisions, does my hon. Friend recognise that, when comparisons are made between the charges for one credit card and another, it is virtually impossible for consumers to get an accurate impression because of the different ways in which the different companies collect their charges? Has he seen the proposals from the Consumers Association and Which? for a standardised method for the collection of credit card interest? This would enable consumers to make a proper comparison between the annual percentage rates of the different cards.

Mr. Sutcliffe: I am grateful to my hon. Friend for that intervention and I congratulate him on the work that he does in Sheffield and elsewhere on these issues. In regulations flowing from the White Paper, the
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Government introduced a uniform calculation of the APR. We talk about responsible lending and borrowing, but the difficulty arises because there are so many different charges that can be included in APRs and the like. It is important that clear and transparent information should be given to the consumer, not only when the agreement is signed but throughout its lifetime.

Mrs. Angela Browning (Tiverton and Honiton) (Con): Does the Minister agree that, when people get into financial difficulties and need advice, the sooner they seek that advice, the better? One of the most accessible places for them to go is their local citizens advice bureau. Does the Minister share my concern that, as a result of local government settlements and grants, there are worries about the viability of some of our CABs and about their ability to give this important advice locally?

Mr. Sutcliffe: I acknowledge the hon. Lady's concern about CABs. She will be aware that the Department of Trade and Industry finances much of their work through national funding. Perhaps, however, she should have words with Members on her own Front Bench about future public spending issues. Clearly, if there were to be cuts in public spending, services such as those provided by the CABs would be at risk.

Chris Bryant (Rhondda) (Lab): Is not one of the difficulties that many people take out a loan or get a new credit card without taking any advice? They do not talk to anyone about it. Instead, they pick up one of the 25 letters that they received through the post just before Christmas asking them if they would like a new credit card and are told that they are guaranteed to get a card and that they can have an advance of up to £3,000. Alternatively, they are sent a little cheque that tells them that they have £3,000 to spend. That is irresponsible lending. Those letters are unsolicited, and they offer guaranteed, pre-approved credit.

Mr. Sutcliffe: I was fortunate enough to be in the Chamber yesterday when my hon. Friend asked the Prime Minister a question on this subject. I am not going to be prescriptive about this, because if I were to give my interpretation of these matters, it could present a problem when we need to deal with dispute resolution and with the courts making decisions. The Bill makes provision for an unfair credit test, and that will involve the need to consider each individual case as it comes along.

On the question of credit card cheques, the banking code—the remit of the banks to work under a code of practice—is to be changed from April 2005, and an updated version covering the use of credit card cheques and the question of who they should go to will be a step in the right direction. I shall be monitoring that issue, and I know that the Treasury Select Committee is looking into it as well.

Malcolm Bruce (Gordon) (LD): Following up that point, is there not a further concern that many people take up these offers without making the calculation as to whether a credit card—as opposed to a bank loan or
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some other mechanism—is the appropriate means of raising the funds that they need? Should there not be an obligation on credit providers to advise people that other, cheaper options exist, instead of simply soliciting their custom without giving them any advice or warning them that they might have to pay a much higher interest charge than they need to?

Mr. Sutcliffe: That goes to the heart of the issues of clarity, transparency and people making sure that they know what they are letting themselves in for. While the argument is about responsible lending, it is also about responsible borrowing, not just for the short term but for the lifetime of agreements.

Mr. James Plaskitt (Warwick and Leamington) (Lab): My hon. Friend has just mentioned forthcoming changes in the banking code. Does he accept, however, that the changes envisaged in that code in relation to credit card cheques will not deal with the unsolicited issuing of those cheques? The White Paper, that his Department produced last year cites as an example of irresponsible lending the unsolicited issuing of credit card cheques, yet I cannot find any measure in the Bill to deal with that.

Mr. Sutcliffe: My hon. Friend is right. He is a distinguished member of the Select Committee, before which I had the honour to appear recently to discuss credit card issues. It has done a tremendous amount of work on credit cards. I think that the banking code is the appropriate route for addressing the issue, but I will keep the matter under review during the lifetime of discussions on the Bill I hope that he will be satisfied with that.

Ms Sally Keeble (Northampton, North) (Lab): I want to take my hon. Friend back to what he said about DTI funding for financial support and advice. In Northampton, our CAB's money advice work was paid for by lottery funding, which has come to end, so nobody is doing that work now. Funding for such incredibly welcome and important work needs to be enshrined in statute, because people need to be able to exercise their right to seek such advice. Will the DTI therefore consider whether there is a proper national spread of available financial advice?

Mr. Sutcliffe: It is important to praise the work of CABs, but others, including industry bodies, local government bodies and a variety of other voluntary sector organisations, also offer financial advice. We will be looking to use some of the £120 million in the financial inclusion fund for debt advice and support. I want to make sure that easy access to such advice is available across the UK. People who find themselves with debt problems tend to leave it too late before they seek advice, and I hope that, as a result of this Bill and other work, people will know better where to go for advice and support. As a result of the Bill, people will be able to get out of unfair agreements.

Andrew Selous (South-West Bedfordshire) (Con): I want to return briefly to the issue of credit card cheques. Will the Minister at least consider requiring credit card companies to make it absolutely clear, in bold letters,
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that the moment those cheques are presented, they cost the customer interest? I regard myself as a person of average financial sophistication, and yet I have fallen foul of that practice.

Mr. Sutcliffe: I refer the hon. Gentleman to the answer that I gave to my hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt). These are serious issues, which I am prepared to examine, but this Bill may not be the appropriate vehicle for that change. I know that the industry will monitor closely what is said in the debate today and in Committee. One of the good things to note is that the industry has welcomed change—it recognises that the 1974 Act is 30 years out of date, that people's attitude to credit has changed dramatically, and that it needs to acknowledge the thoughts and views of the consumer. That is the balance that we are trying to strike.

As I said, the first Act was introduced in 1974, and at that time, there was one credit card carrying a total debt of around £32 million at today's prices. It took six years to put in place the detail of the 1974 Act. We have been criticised for taking some time to prepare the Bill, but I make no apology for that, because it is a complex marketplace, and very important to the economy.

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