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Michael Fabricant: Bills are published and there is a regulatory impact assessment, to which the Minister referred. However, who works out that assessment? Often assessments say that there will not be a burden on business or on the taxpayer, but when a Bill is implemented hundreds of millions of pounds are spent. Who worked out these particular figures?

Mr. Sutcliffe: The hon. Gentleman has been in the House long enough to know who works out the figures. The assessments are made by everyone who has an input into the Bill and its effects. The process is not perfect, but people do their best. As Bills proceed, we try our best to make sure that relevant points are taken on board.

I have explained to the House and the Committee our view of the OFT's duties. Sufficient procedures are in place, and the new clause is unnecessary, so I urge the hon. Member for Wealden to withdraw it.

I thank the hon. Member for Wealden for tabling new clause 5, but it will come as no surprise that we shall resist it. It seeks to impose on the OFT a duty to produce an annual report covering its duties under the Consumer Credit Act 1974 and the work done by Trading Standards Services on the OFT's behalf, as provided for under clause 50. It requires the Secretary of State to take any report produced by the OFT under the new clause into consideration when issuing regulations in relation to the Act. I shall break the proposal down into its components, starting with the annual report.

The OFT is already obliged to present an annual report to Parliament under the Fair Trading Act 1973 and the Enterprise Act. The most recent report was published last month, and it reports on the work done on consumer credit under the Consumer Credit Act and the Enterprise Act. When looking at the work of the OFT it is best to look at its consumer credit work in the context of all that it does, not just its duties under the Consumer Credit Act. Secondly, the new clause would require a report on the OFT's duties under the Consumer Credit Act. One of those duties is to keep the working and enforcement of the Act under review and from time to time to advise the Secretary of State about that. That review and advice covers social and commercial developments in the United Kingdom and elsewhere relating to the provision of credit.

The new clause proposes that the OFT should review the work of enforcement authorities that have acted on its behalf under clause 50. I think that the key issue is the fact that when other enforcement authorities act under clause 50 they do so as if they were the OFT. They are under the direction of the OFT, so a report that treats those OFT powers as if they were carried out by a separate body is not appropriate, given that that is already covered in the OFT's report.
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Finally, the new clause would require the Secretary of State to take into consideration any report made by the OFT when issuing regulations in relation to the amended Consumer Credit Act. In fact, my right hon. Friend the Secretary of State goes further than that, and consults many stakeholders, including the OFT, before deciding what action to take. The new clause is unnecessary, and I urge the hon. Member for Wealden to withdraw it.

Charles Hendry: I am grateful for the half measure of support from the hon. Member for North Norfolk (Norman Lamb), which is an improvement on what might otherwise have been the case. I am also grateful for his support in principle for the aim of the new clauses.

We can certainly discuss the balance of the new clauses, but we tabled them because we are concerned about the lack of detail in the Bill. I shall deal with the Minister's comments about that in a moment. My hon. Friend the Member for Lichfield (Michael Fabricant) was quite right, as he is on so many matters, that there is a sense of complacency. This is the first time that we have looked at the Consumer Credit Act for 30 years, and we cannot leave it that long to look at the issues again. My hon. Friend may still be here then, as may the Minister, although he will obviously have been in opposition for 26 years. We have been given a tremendous opportunity, and I am disappointed that the Minister did not choose to take it up.

The Minister said that it would come as no surprise that he would reject the new clauses. The only surprise I expect today is his accepting one of my amendments. I hope that a resuscitation unit is available, as it would be quite out of character for him to do so. I am grateful for his detailed and clear response, but my approach is fundamentally different from his. The Minister said that we were trying to have it both ways by asking for detail and a consultation. Consultation, however, will help us to decide what people want in the Bill. One of the things that has been made abundantly clear is the desire for greater detail. If the Minister responded fully to the consultation, he would provide greater clarity in these and other provisions in the Bill.

Essentially, the OFT has a blank piece of paper. Someone will be rubbing their hands and thinking, "Right, I can do what I like." They believe that they do not have to take account of what Parliament has said because they have been given unfettered powers. If Parliament does not like it, that person will be the judge and jury. We have an opportunity to include in the Bill the OFT's role and general objectives. It is a great shame that the Minister does not regard that as desirable or important. I accept that some of our proposals are covered by other pieces of legislation but, nevertheless we should return to this issue. Perhaps the other place can look at it. Accepting that the Minister is standing his ground, however, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.
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Clause 9

Notice of sums in arrears under fixed-sum credit agreements etc.

Mr. Sutcliffe: I beg to move amendment No. 7, in page 8, line 16—

'(9A)   If an agreement mentioned in subsection (9) was made before the beginning of the relevant period, only amounts resulting from failures by the debtor or hirer to make payments he is required to have made during that period shall be taken into account in determining any shortfall for the purposes of subsection (1)(c).

(9B)   In subsection (9A) "relevant period" means the period of 20 weeks ending with the day on which the debtor or hirer is required to have made the most recent payment under the agreement.'.

Madam Deputy Speaker: With this it will be convenient to discuss amendment No. 4, in page 8, line 20, at end add—

'(11)   This section shall not apply if there is no prejudice to the interests of the debtor or hirer.'.

Mr. Sutcliffe: Well, we need to get the resuscitation team ready, because I have listened to what hon. Members have said and Government amendment No. 7 is the result. This amendment recognises the concerns of the hon. Members for Wealden (Charles Hendry) and for North Norfolk (Norman Lamb) in relation to the issuing of notices of sums in arrears where the agreement has a repayment interval of one week or less.

The amendment alters the circumstances in which the creditor must provide a notice. Previously, for a notice to be issued, the debtor must have been in arrears to an amount equivalent to four missed repayments. The amendment refines that requirement, so that the obligation to give an arrears notice only arises when the debtor is in arrears to the equivalent of four missed repayments within a period of not more than 20 weeks, ending on the date on which the last missed repayment was payable under the agreement. In those circumstances, the lender is required to provide a notice within 14 days of the date on which the last missed repayment was payable.

I do not believe that the amendment will reduce consumer protection. Many consumers in this sector are vulnerable. But this change recognises the flexibility with repayments that applies in respect of many of those agreements. However, where the debtor has problems, and misses four repayments within the specified period of no more than 20 weeks, or five months, they will receive a notice along with information from the OFT to assist them in dealing with any problems they may have.

While I do not condone or accept that consumers should be in arrears, or that lenders should encourage or permit them to think that that is acceptable, the amendment recognises that the way that lenders administer many agreements with weekly repayments is flexible and caters for the odd missed repayment over time. So to that extent, I accept that the provision of notices under the existing clause could be more than is required in such circumstances. I hope that the hon. Gentlemen will be pleased with the amendment.
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