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Mr. Prisk: Indeed, and I am sure that he will do so throughout this debate.
Mr. Bone:
What worries me is that no practical examples have been given of what the wording means, which is no good for the industry or the consumer. I hope that the Minister will give such practical examples.
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Mr. Prisk: I am grateful to my hon. Friend for that intervention and he is right: one key issue with all such legislation is ensuring that we think through its implementation. Sadly, that skill seems to be lacking on the Government Benches, but I have every confidence in the Minister and, hopefully, he will be able to shine in the darkness of his colleagues' abilities. However, we shall see. I am a generous soul and I am always happy to give the benefit of the doubt on these matters.
Mr. Mike Weir (Angus) (SNP): What does the hon. Gentleman regard as irresponsible lending? I am slightly concerned that some Conservative Members are trying to include in the Bill a prescriptive list. That would be very dangerous, because it is the nature of irresponsible lending that it can mutate, depending on when such a lender is found out and another appears.
Mr. Prisk: The hon. Gentleman is right to suggest that if we become too prescriptive, the danger is that we will tie the hands of the authorities involved. But I hope that during this debate, we can clarify the parameters within which those authorities will operate; indeed, that is perhaps the essence of our consideration this evening.
Mr. Sutcliffe: I do not want to interrupt the flow of the hon. Gentleman's argument—I appreciate that it might take him some time to get to the detail—but I should point out that amendment No. 3 would establish a licensing responsibility on the part of the OFT in examining the concept of irresponsible lending. He and his colleagues are widening the debate to include the unfairness test, but the amendment is concerned with the OFT's powers in relation to the licensing function.
Mr. Prisk: I would be very unwise were I to try to widen the tenor of this debate, Mr. Deputy Speaker, because I know that you would be the first person to bring me back in order. So although I understand the Minister's natural concern, I shall certainly do my best to ensure that we do not fall into that trap.
I have received a significant number of representations on amendment No. 3 that merit what I am sure will be a proper response from the Minister. Amendment No. 4 would amend clause 50, which deals with
an issue to which I shall return in a moment. Amendment No. 5 seeks to ensure that the powers in clause 68 to modify certain legislation should be allowed only by means of the affirmative resolution procedure of the House, and not by the unsatisfactory negative procedure, a problem to which Members have referred before. So as I suspect Members can see, these amendments are of significance and will have important ramifications for those affected—lenders and borrowers, creditors and debtors alike.
Amendment No. 1 would amend clause 7(3) by removing the word "his" in proposed new subsection (2) and inserting the phrase "the debtor's". So once amended, it would state that
"the creditor need not give statements to any debtor who has signed and given to him a notice (a 'dispensing notice') authorising him not to comply in the debtor's case with section 77A or (as the case may be) 78(4)."
As Members will doubtless appreciate, although this is a technical matter it is also one of some substance. As I said earlier, transparency is indeed key to the whole Bill, and to that end, we welcome the use of the phrase "the debtor's" instead of the word "his", in order to clarify earlier references to creditors and debtors. However, if Members consider the context of new subsection (2), they will immediately notice the confusing aspects of the remaining drafting. The beginning of new subsection (2) states:
"Notwithstanding subsection (l)(a), where credit is provided under an agreement to two or more debtors jointly, in performing his duties—
That is followed by the part that I read out a moment ago, in which the phrase "the debtor's" is inserted for the word "his".
The Bill remains confusing and difficult, especially as what is proposed is to be inserted into the original 1974 Act. Does the Minister consider the language to be transparent?
Clarification of the Bill at this late stage is welcome, but we have consistently said that the fundamental problem is that it is vague and lacking in detail. Those problems persist, to the detriment of consumers and lenders alike.
Amendment No. 2 to clause 20 is small but equally significant. It would remove subsection (4), which at present states:
As I was not clear what that meant, I looked at the background. Clauses 19 to 22 introduce a new unfair relationship test, as the Minister mentioned earlier. The new test will expand the number of factors that the court must take account of when considering the fairness of agreements between creditors and debtors. It will enable the court to decide whether a relationship between a creditor and debtor was unfair to the debtor due to the terms of the agreement, or the way that the creditor operated the agreement, or
before or after the agreement was made.
Clause 20(4) was originally put in the Bill to prevent the courts from setting aside other judgments previously made, in line with the rule that a court cannot reopen a transaction previously subject to a judgment by the court. The comparison is not direct, but people will recognise that as resembling the double jeopardy principle. I am sure that my hon. and learned Friend the Member for Harborough (Mr. Garnier) will clarify matters if I stray too far in respect of judicial consideration in other types of court, so I shall not pursue the matter.
However, the Government subsequently reconsidered the provision's impact, and the Minister said earlier that it was decided that clause 20(4) would be an obstacle to enabling customers gaining effective redress from creditors via the court.
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Mr. Davey: The hon. Gentleman may be doing a disservice to the Opposition Front Bench in the other place. Did not the Conservative Lord De Mauley first propose the amendment in the Grand Committee?
Mr. Prisk: I am not condemning the amendment. I want to ensure that it is implemented effectively. I have every confidence in Lord De Mauley, who is an excellent representative of my party in the other place.
The Minister will know that a very similar amendment was tabled in Grand Committee, as has just been noted. We welcome the Government's intention to remove an obstacle to consumers gaining effective redress through the courts. The Minister likes candour and a cross-party approach, so it is fair to say that the amendment is insignificant, in the overall scheme of things, when compared with the much bigger difficulties that the new unfair relationship rules present.
I shall not rehearse in detail all the points raised repeatedly in this House and the other place. However, the Minister will be fully aware of the concerns that have been expressed, and that various implementation issues remain unresolved. We support the general principle of a new unfairness test, but are concerned about the lack of clarity in respect of what that will constitute in practice. I want to use the debate to tease the details out in a positive way, so that they can be put on record.
8.15 pm
Mr. Sutcliffe: I am grateful to the hon. Gentleman for pointing out that it was the Opposition who proposed a similar amendment in the Grand Committee. That was withdrawn, and the Government put forward the amendment under consideration now. However, I assure him that he can say nothing to tempt me to change my view of the unfair relationship test. I hope that that will prevent him from going on too long. The hon. Gentleman can be eloquent, but he will not change my mind.
Mr. Prisk: The Minister is protective of my larynx, and I am grateful, but I want to ensure that the House as a whole is aware of the issues involved. My argument is not for his benefit alone, but is for consideration by all hon. Members. However, I appreciate what he says.
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