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Mr. Sutcliffe: With the leave of the House, I should like to respond to an excellent debate on a serious issue, which affects many of our constituents and an industry that contributes well to our economy.

In my opening remarks, I said that the Bill's fundamental principles were transparency, responsibility, protection and fairness. I believe that it will deliver that. Front-Bench spokesmen from the Opposition parties made excellent contributions this afternoon. I am pleased that my hon. Friend the Member for Ochil (Mr. O'Neill), who chairs the Select Committee on Trade and Industry, and my right hon. Friend the Member for Dumbarton (Mr. McFall), who chairs the Treasury Committee, are present. I want to put on record my thanks to them and the members of their Committees for their excellent work in deliberating on credit and other financial inclusion issues.

Many hon. Members made tremendous contributions, because it has been one of those rare occasions in the House when a Bill gets the general support of all parties. Of course, there are matters of detail to discuss and the Committee and Report stages will be eventful. I am grateful for the expertise that hon. Members' contributions have shown. Indeed, we heard that my hon. and learned Friend the Member for Dudley, North (Ross Cranston) has published a textbook on many of the problems that we discussed. Excellent speeches were made and competition for places on the Committee will be strong because many hon. Members want to ensure that the Bill meets the objectives that we are trying to achieve.

The debate generally showed consensus. The hon. Member for Eddisbury (Mr. O'Brien), supported by the hon. Member for Bexhill and Battle (Gregory Barker), introduced a little of the political agenda and I want to set the record straight. I shall set out the strong economic position that the Government have achieved—hon. Members would expect nothing less of me. We have the lowest unemployment for 29 years, the longest period of sustained economic growth for 200 years, the lowest mortgage rates for 40 years and the lowest inflation since the 1960s. That is a good record from which to examine many of the issues that we have discussed today.

Some, albeit not many, Opposition Members tried to insinuate the idea that credit was bad for people. On the whole, credit, when used sensibly, is a useful tool for many people. As the hon. Member for Upminster (Angela Watkinson) said, attitudes have changed greatly. The industry has expanded from only one kind of credit card in 1974 to the 1,500 products and 39 million credit cards that now exist. In the UK economy, there has been a 50 per cent. increase in total net household wealth. We have experienced average growth of 3.1 per cent. in real household disposable income since 1997. More importantly, 2 million more
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people are in work. That makes a great difference. I chide the Conservative party a little for presiding over interest rates of 15 per cent. and 3 million unemployed.

I am confident that the macro-economic position that the Government have created gives people the ability to make decisions about their economic choices. Credit can be a useful tool for that. However, there are important issues such as savings. As I said earlier, the key matter for me is the proportion of household disposable income that is spent on interest payments, which was 7.6 per cent. for the first quarter in 2004. That is a good indicator.

I was asked several questions in the debate and I shall try to answer as many of them as possible and as quickly as possible in the time that remains. If I cannot answer them all in the time, I shall write to hon. Members. We shall go through the Bill's many clauses in great detail in Committee. I shall not suffer from lack of advice, given the many issues that were raised in the debate.

One of the key issues raised was the use of secondary legislation in relation to the interest rate ceiling, and I want to clarify our position on that. The hon. Member for Eddisbury is quite right; I did say on the radio that we could introduce secondary legislation on the interest rate ceiling. On reflection, however, I see that that would not be the right way to do it. We will review the position, and I know that hon. Members will raise the issue in Committee. Given the evidence in the report that we commissioned, and the consultation documents that we received from a variety of bodies, we are not convinced that an interest rate ceiling would be adequate to cover the problems involved. The unfair credit test will affect extortionate credit. The reason for not going down the secondary legislation route is that we have consulted fully on this Bill all the way through. It would therefore be wrong to use secondary legislation as a vehicle, without going through further full consultation. I hear what my hon. Friends have said about interest rate ceilings, and I look forward to our debates in Committee, when we shall be able to put on record the various reasons why we do not favour that particular route.

Another key element of the debate involved credit card cheques. My hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt), a key member of the Treasury Committee, has raised this issue on a number of occasions. He pointed out that one of our own documents talked about the inappropriateness of such cheques. I favour the change to the banking code of practice as a means of dealing with this, but we shall need to monitor the issue and, if that is unsuccessful, we shall have to return to it and see what we can do. If the cheques are being sent to vulnerable or inappropriate people, that could be caught up by the unfairness test. Perhaps we need to look at that.

Many hon. Members talked about the role of credit unions. The Government believe that credit unions have an important role to play in the provision of greater choice and diversity in the financial services sector. We have been involved in a number of initiatives to help the movement to grow and to offer a greater range of services to its members. Credit unions certainly have a key role to play.
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Many hon. Members also supported the work of the citizens advice bureaux and the other organisations that give help and support to people who have difficulty with debt. We are working closely with Citizens Advice to inform it of the changes, so as to give it time to revise its information and training. It has estimated that the initial cost to Citizens Advice of the introduction of the Consumer Credit Bill will be in the region of £1 million, so we are going to have to look at the resource implications of that. I noticed that the hon. Member for Eddisbury did not make a commitment to fund the citizens advice service in the way that we do, through the DTI, should that awful day ever arrive when his party is again in Government.

Debt advice is important, and the credit industry is looking at the issue. We are working on many ways of targeting the best kind of advice, particularly in regard to vulnerable consumers. We are helping to develop a gateway to telephone advice services that will signpost consumers to the service appropriate to their needs. We are also working to ensure sustainable funding for the free debt advice sector, and encouraging increased contributions for three-year periods.

There has been a great deal of discussion on the £50,000 penalty limit, and we can usefully discuss in Committee how we arrived at that figure. We can also consider the way in which we want the penalty to be imposed for breaches of requirements, and not for extortionate or unfair credit. The penalty cap is not unprecedented. There is provision for such a cap in the Competition Act 1998. It will be useful for us to have a debate in Committee on that subject, and on the licensing regime. We considered the introduction of a provision relating to 10 per cent. of turnover—a provision that is also in the Competition Act—but we decided that it might be inappropriate. Hon. Members from Scotland raised the question of time orders. I am keen to ensure that they will be a useful vehicle, and we need to take up the offers that have been made, to ensure that there is consistency throughout the UK.

This is an important Bill, and we will look at it in great detail in Committee. It is long overdue—it has taken 30 years to introduce it—and we need to ensure that it gets on to the statute book as soon as possible. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.


Motion made, and Question put forthwith, pursuant to Standing Order No. 83A(6),

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