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Charles Hendry: I have been delighted to have the chance to lead for the Opposition on such an important Bill, which will help to bring consumer protection in the UK up to speed with the considerable changes that have taken place in the credit industry in the 30 years since the introduction of the Consumer Credit Act 1974.
The extent to which things have changed in terms of the size of the industry, the range of products on offer and the level of indebtedness among consumers shows how outdated that legislation has become and how imperative it is that new measures are introduced to respond to the situation. From the outset, we have made it clear that the Conservatives give the Bill broad support in achieving that goal and we are fully committed to action to root out loan sharks and bad practice, especially as it is the most vulnerable who are usually the hardest hit.
We have raised concerns and probed the Minister on a number of issues and problems along the way. That was part of the process of ensuring that we get things right this time and that the Bill can cope with the demands that will be placed on it by future changes in the credit industry. Had the Minister been prepared to say "yes" a few more times, the Bill would have been even better, but we shall leave that to our friends in another place.
I pay tribute to Members on both sides of the House for their expertise and for their determination to look after the interests of people preyed on by those who seek to exploit their financial circumstances and their lack of understanding of sharp lending practices. An understanding of the issues and the passion to drive them forward is a good combination and we have been lucky that Members have demonstrated that.
Many Members referred to tragic cases where individuals were caught up in a vicious cycle of worsening debt, often caused by unscrupulous lenders and unfair practices. That was an important part of our considerations and it is those lenders and practices that the Bill seeks to stamp out. At the same time, it is important that the Bill does not stifle the ability to operate of credit businesses that behave responsibly and whose services are often of great benefit to individuals and families, especially those on low incomes. We recognise that the overwhelming majority of credit providers act responsibly and the legislation, although it will inevitably affect them, is not targeted at them.
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As the Minister said at the outset, debt of itself is not bad; it is irresponsible lending that causes the problem. By far one of the most important aspects of the Bill has been the new unfair relationship test, which replaces the old, impractical, extortionate credit test. We support the new test as a means of clamping down on loan sharks and unfair practices but, as the Minister is well aware, we are concerned about the lack of detail. As he knows, we have argued powerfully for that greater detail and we are disappointed that he has not given ground on it. Many of us believe that the Bill will be of less benefit to consumers as a result. It should be Parliament that gives the detail, not the courts, with all the time and huge costs that that will involve. It means that lawyers will benefit rather than borrowers.
"It is a great shame the opportunity was missed at the Committee stage to improve the Bill. While we support the broad thrust of the Bill, we still don't believe it goes far enough. We strongly urge MPs to grasp this last opportunity to make a real difference to consumers. Some practices, like credit card providers applying payments to the cheapest debt first, remain unfair and can only be to the detriment of the consumer. Any debt counsellor worth their salt would tell you to pay off your most expensive debt first."
We also welcome the new systems of redress provided through the Financial Ombudsman Service. The Bill also provides expanded powers for the OFT as a means of improving regulation. Again, we agree that better regulation of licensees is a crucial step forward, but we remain concerned that the OFT's powers will go unchecked and that it will be judge and jury. We would like to see more control retained by Government and Parliament over its actions.
Another crucial dimension of the Bill is the increased level of information provided to consumers concerning their credit agreements. That, too, is an important step forward towards tipping the balance of power back towards consumers. They need to be granted an equal standing and to have access to appropriate information to make informed choices over their credit decisions. It is also a vital means of helping consumers avoid getting into trouble with their agreements. I am pleased that the Minister has been working with us to ensure success in this respect.
I join the Minister in paying tribute to our two Chairmen, the hon. Member for North-West Leicestershire (David Taylor) and my hon. Friend the Member for Old Bexley and Sidcup (Derek Conway), for the way in which they kept us in order during debates. I pay tribute to hon. Members on both sides of the House who have spoken with such passion and commitment on what is an important area for many of our constituents. In particular I pay tribute to my hon. Friends the Members for Hemel Hempstead (Mike Penning), for Wantage (Mr. Vaizey) and for Hornchurch (James Brokenshire), who as new Members have shown tremendous commitment, understanding and expertise. I do not restrict my comments to Conservative Members. This has been an extremely valuable process on all sides, with many years of expertise brought to bear.
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We have had a wide-ranging debate. We have focused in particular on issues, such as loan sharks, but we have also discussed a helicopter clause, so that when the Prime Minister's friends need to buy a new helicopter or yacht at short notice, they can be given greater assistance in doing so. We have made progress on those issues. Naturally, I pay tribute to the Minister who has been courteous and charming throughout. He is the natural heir to General de Gaulle and Mrs. Thatcher in being able to say no so forcefully and so often, but I wonder whether perhaps he should move in his next life to the Department for Transport because his sense of direction is remarkable. He always knows where we are coming from and understands where we are heading in every contribution. As I said earlier, it is just a shame he would not help us get there.
I thank the officials at the DTI and in the House. Departmental officials must have dreaded yet another list of Hendry questions. No doubt forests were torn down, gallons of ink were expended and writers' cramp inflicted simply to give the Minister the answer as quickly as possible. They have been extraordinarily helpful, too, in providing written replies subsequently. I was particularly struck by the one about my challenge to the Minister to find some fees which had gone down under this Government. They produced an extensive list of Companies House charges. However, I win on points. The Directors Register by e-mail has indeed gone down from £3 to £2.50 but things like the full snapshot of the Directors Register has increased from £60,000 to £120,000. The list shows that the general drive is upward, even if there are some examples of fees that have come down. In any case, the officials have provided a great service, both in Committee and subsequently.
The Minister has made a tremendous effort to bring the Bill back to the House so quickly, and we all pay tribute to him for doing so. He should be praised for that, and for consistently dealing with our amendments with great courtesy and good humour. I am pleased with the level of consensus that we have struck throughout the Bill's progress and, although we have not always been able to agree on the detail, we all want to see the same end productmore protection for consumers, better systems of redress, more access to information and better regulation.
I regret that the Government rejected our proposals on matters such as credit card checks and controlling unsolicited increases in credit limits. I sense that most hon. Members supported us and we will look back and regret that we were not more effective. I am also disappointed that some issues were ruled out by the Chair although of course we respect that judgmentsuch as the amendment on the standardisation of interest rate calculations, which is a matter of tremendous importance.
I remain concerned by the complacency about the growing level of debt that we face in this country. The Minister was able to point to the rising value of property and the huge bedrock of capital that supports that debt, but we are seeing a worrying growth in credit card arrears, bad debts, mortgage repossessions and bankruptcies. We need be aware that the problem could be getting worse.
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We have, however, gone a substantial way to reaching the aims that we set out to achieve and we all look forward to monitoring the Bill's progress. To end on a conciliatory note, I congratulate the Minister once again on his personal commitment to ensuring that the Bill becomes law.
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