(Morning)
[Mr. Joe Benton in the Chair]
9.25 am
Clause 30 ordered to stand part of the Bill.
Clause 31
Variation of standard licences etc.
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe):
I beg to move amendment No. 3, in clause 31, page 24, line 2, leave out subsection (8) and insert—
'''(8) Subsection (1) shall have effect in relation to a standard licence as if an application could be made for the renewal or further renewal of the licence on the same terms (except as to expiry) even if such an application could not be made because of provision made in a general notice under section 24A(5).
(9) Accordingly, in applying subsection (1AA) of section 25 in relation to the licence for the purposes of this section, the OFT shall treat references in that subsection to the description or descriptions of business in relation to a type of business as references to the description or descriptions of business included in the licence in relation to that type of business, notwithstanding that provision under section 24A(5).''.'.
The Chairman: With this it will be convenient to take Government amendment No. 4.
Mr. Sutcliffe: Welcome to the Chair, Mr. Benton. You will see that the Bill is making great progress, being properly scrutinised and being dealt with in a convivial manner.
Amendment agreed to.
Amendment made: No. 4, in clause 31, page 24, line 13, leave out
'because a person can no longer'
and insert
'simply because, by virtue of provision made in a general notice under section 24A(5), a person cannot'.—[Mr. Sutcliffe]
Clause 31, as amended, ordered to stand part of the Bill
Clause 32
WINDING-UP OF STANDARD LICENSEE'S BUSINESS
Amendments made: No. 7, in clause 32, page 24, line 20, after 'step', insert
'for such period as it thinks fit'.
No. 5, in clause 32, page 24, line 27, leave out subsections (3) and (4) and insert—
'(3) Subject to subsection (4), where the OFT defers the taking of a step falling within subsection (2), the licence shall continue in effect for the period of the deferral—
(a) on the same terms (disregarding the OFT's determination to take the step falling within subsection (2)); or
(b) in the case of a step falling within subsection (2)(b), on the terms applied for;
and, in the case of a step falling within subsection (2)(a) or (b), notwithstanding that apart from this subsection the licence would expire before the end of the period of the deferral.
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(4) Where the OFT defers the taking of a step falling within subsection (2), it may—
(a) specify activities or descriptions of activities which are to be excluded from the activities authorised to be carried on by virtue of subsection (3);
(b) specify requirements which must be complied with by the licensee during the period of the deferral in relation to the activities authorised to be carried on by virtue of that subsection;
(c) terminate the period of the deferral if the licensee fails to comply with a requirement specified under paragraph (b).
(4A) Under subsection (4)(a) an activity may be excluded for the whole of the period of the deferral or for only a specified part of it.'.—[Mr. Sutcliffe]
Clause 32, as amended, ordered to stand part of the Bill.
Clause 33 ordered to stand part of the Bill
Clause 34
DEFINITE AND INDEFINITE LICENCES
Mr. Laurence Robertson (Tewkesbury) (Con): I beg to move amendment No. 32, in clause 34, page 27, line 39, at end insert—
'(1E) In all cases, the OFT shall state its reason for allowing for a limited period only, when the application was for an indefinite period, and those reasons shall be consistent with the guidelines the OFT itself sets out.'.
I, too, welcome you to the Committee, Mr. Benton. As the Minister said, it has been conducted in a professional and convivial manner. I am sure that that will continue under your chairmanship.
Amendment No. 32 deals with the length of time for which licences will be given. As I understand it, licences are currently renewed every five years. The clause will enable a move towards licences having effect indefinitely. However, there is a caveat, which is that the Office of Fair Trading can refuse to give an open-ended licence if it thinks that there is good reason why one should have effect for a limited period only. My amendment seeks to ask the OFT to state its reason for not giving an indefinite licence.
I accept that there are many instances when the OFT should look at the way in which a licensee conducts business. One of the Bill's general objectives is to allow the OFT to do that in between issuing licences, as legislation permits at the moment, but on a rolling basis when those licences are indefinite.
All I ask is that the OFT, when it varies the granting of indefinite licences, should give a reason for doing so. What I ask may be seen as yet another assault on the power of the OFT, and I make no apology for that. I have said previously, and will probably say again, that the OFT has too much power. It is rather a free spirit, and that has not always been to the benefit of the business that it is supposed to regulate. I make no apology for wanting to try to clip its wings a bit.
Mr. Sutcliffe: I recognise the spirit in which the hon. Gentleman moved the amendment—
Mr. Robertson: But?
Mr. Sutcliffe: The hon. Member for Tewkesbury (Mr. Robertson) is right; there will be a ''but''. The amendment is unnecessary, and I hope that he will bear with me as I explain why. I am aware of his
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continuing diligence in watching the work of the OFT, and I have come well armed today with defences of that organisation's role. I am sure that we can look forward to further debate.
I agree that people should be told why they are granted a licence that is different from the one for which they applied. However, his amendment is unnecessary because the OFT already gives reasons for its licensing decisions. The decision to grant an indefinite or time-limited licence is no exception: that is good practice.
Section 27(1)(a) of the Consumer Credit Act 1974 requires the OFT to give reasons for issuing a licence on different terms from those of the application. The amendment also mentions OFT guidance, and clause 30 requires the OFT to have regard to the most recently published guidance. Therefore the OFT is already required to do what the amendment proposes. I hope that I have explained that to the hon. Gentleman and that he will withdraw his amendment safe in the knowledge that he does not have to clip the OFT's wings on this occasion.
Mr. Robertson: The OFT may give reasons, but I do not know that it is required to do so. The Minister referred to the 1974 Act, which requires the OFT to give reasons. However, the Act does not refer to open-ended licences as they did not exist in 1974; the Bill will introduce them. My amendment is desirable for technical reasons, but on this occasion I shall not press it to a Division.
Mr. Sutcliffe: I am not trying to be dismissive, because the hon. Gentleman has a point that we shall consider in greater detail to ensure that it is covered. The aim is to strike a balance between the 1974 Act and the guidance contained in clause 30. However, we shall consider what the hon. Gentleman has said and not dismiss it out of hand.
Mr. Robertson: I am grateful for that explanation. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 34 ordered to stand part of the Bill.
Clauses 35 to 37 ordered to stand part of the Bill.
Clause 38
POWER OF OFT TO IMPOSE
REQUIREMENTS ON LICENSEES
Mr. Robertson: I beg to move amendment No. 46, in clause 38, page 30, line 30, leave out from first 'licensee' to end of line.
The clause gives power to the OFT to impose requirements on licensees. Proposed new section 33A(1)(a) will apply when the OFT is dissatisfied with any matter that is in connection with—
''a business being carried on, or which has been carried on, by a licensee or''—
this is the crucial bit—
''by an associate or a former associate of a licensee.''
The implication is that if the behaviour of a former associate of a licensee has been inappropriate, the OFT can impose requirements and either rescind a licence or not grant it. That is possibly unfair and rather open
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ended. If by ''former associate'' is meant one who was an associate a month ago, the OFT probably has a right and a duty to investigate the relationship and perhaps to act on it. However, if an association ended a year, two years or five years ago, should the OFT still be required to investigate it? Should the OFT be given the same power to rescind the licence because of a relationship that existed a long time ago?
I raised a point at our last sitting on clause 29(2A)(d) at the last sitting, which sets out some of the criteria for deciding whether people are fit to hold licences. One example that the OFT was considering was somebody who has practised discrimination on grounds of sex, colour, race or ethnic or national origin and so on. That is an all-encompassing subsection, and at the last sitting, I condemned such behaviour; however, I did not see the relevance of the provision.
Under this clause, not only could the licensee be held responsible for any malpractice in that sense, but it seems that his former associates could also be held responsible. Again, I am concerned about the power of the OFT in that regard, especially when the clause and subsection seem rather vague and open ended. I would appreciate the Minister's explanation as to why that particular wording is in the Bill. It is not the only instance of it, but this is probably where it is of most concern.
