6 Consultation
28. One of the tests outlined in paragraph 24
relates to adequate consultation. The requirements here are laid
out in section 13 of the LRRA. Section 13(1)(a) of the LRRA says
the Minister concerned must:
"consult such organisations as appear to him
to be representative of interests substantially affected by the
proposals"
29. The proposals contained within the draft
Order were subject to a three month consultation which ran between
19 December 2007 and 12 March 2008. The consultation was sent
to 101 interested parties. Twenty-two replies were received. The
views of some consultees came via their trade associations. The
overall response to the proposals was positive, although, in light
of comments made, some changes were introduced prior to the draft
Order being laid. The Explanatory Document states:
"The consultation confirmed our [BERR] view
that the proposals would, in all cases avoid any unnecessary and
unintended burdens on industry and would not be detrimental to
consumers. The proposals were particularly welcomed for their
simplicity and clarity'".[24]
30. The only dissenting voices that arose from
the three proposals in the draft Order came from the Money Advice
Trust and Citizens' Advice (who are partners of the Trust). Their
concern focussed on the proposed exemption from regulation for
buy-to-let lending under the 1974 Act. They argued that this
would remove protection for buy-to-let investors who run into
financial trouble and are forced to sell the relevant buy-to-let
property at a loss. The basis for this view is that there could
be a risk to the investor's own home if proceeds fail to cover
outstanding credit.
Welsh, Scottish and Northern Ireland
Ministers
31. Consumer credit is a reserved matter. The
consent of Welsh and Scottish Ministers to the proposals in the
draft Order are not therefore required. However, the consultation
document was sent to both the Scottish Executive and the Welsh
Assembly Government, neither of whom replied.
32. Consumer credit is a devolved matter in Northern
Ireland. But, with the consent of the Northern Ireland Assembly,
the UK Parliament can still legislate for Northern Ireland with
regard to consumer credit. Ministers agreed that the 2006 Act
would apply to Northern Ireland. The Minister for Enterprise,
Trade and Investment in Northern Ireland approved the inclusion
of Northern Ireland in the draft Order. The Enterprise, Trade
and Investment Committee of the Northern Ireland Assembly did
not comment on the draft Order.
33. We believe that the responsibilities relating
to consultation procedures as laid out in section 13 of the LRRA
have been duly fulfilled.
24 ED, p7, para20. Back
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