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Consumer Credit Bill

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"““Officers of enforcement authorities other than OFT””," 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—""(a) in the case of fixed-sum credit, under section 77A, or""(b) in the case of running-account credit, under section 78(4)””." 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:"““An order under this section shall not alter the effect of any judgment.””" 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"““any other thing done (or not done) by . . . the creditor””" 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.