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Consumer Credit Bill

The hon. Gentleman is right. Data sharing is crucial. His predecessor as Liberal Democrat spokesman had discussions about it with the Minister and me. The matter is proceeding, so perhaps cross-party consensus could be developed. Moving from that consensual tone, I turn to amendment No. 3, which would amend clause 29 by inserting an additional subsection at the end of line 6, page 24. I shall not read it out as I am sure that Members have studied it. The amendment makes explicit the power of the OFT to take account of irresponsible lending when monitoring and enforcing the fitness of licence holders. As originally drafted, the Bill required the OFT to have regard to the"““skills, knowledge and relevant experience””" of any person applying for a licence in relation to consumer credit, consumer hire or ancillary credit services. It also required the OFT to bear in mind whether an applicant had"““committed any offence involving fraud, dishonesty or violence””," contravened any relevant law relating to consumer credit, engaged in discriminatory practices or business practices that the OFT judged deceitful—a point to which my hon. Friend the Member for Wantage (Mr. Vaizey) referred earlier—oppressive, unfair or improper. In Committee, several Members on both sides of the House supported amendments to include a requirement that creditors lend responsibly. The Government originally resisted those proposals. However, as the Minister told us, considerable concern has been expressed throughout the passage of the Bill about the fact that debt in itself is not the problem, but that irresponsible lending and, therefore, borrowing can be. Lending to someone who is already up to their neck in debt is neither sensible nor responsible. It is good neither for the customer nor, in the end, the lender. In previous debates, here and in the other place, the Government steadfastly refused our calls for a specific power on irresponsible lending in the Bill, on the grounds that it would be difficult to define irresponsible and that including such a specific duty would require guidance as to what did and did not constitute irresponsible lending. The Minister in the other place, Lord Sainsbury, stated:"““A positive duty to lend responsibly may, considered in isolation, appear attractive. However, by imposing such a positive duty, the consequence is that the guidance will need to provide lenders with sufficient information to comply with that positive duty. That would involve the compilation of a list of rules of what is and is not responsible lending.””" He concluded:"““We want to encourage responsible lending. But we do not believe that the way to do this would be to include an unhelpful duty in the legislation or in guidance. We are convinced that it will lead to the development of a multiplicity of procedural rules, which we want to avoid.””—[Official Report, House of Lords, 18 January 2006; Vol. 677, c. 742–43.]" We welcome the Government’s willingness to recognise that that would not be the case in their U-turn on the matter. Does the Minister now believe that guidance on what constitutes irresponsible lending will not after all reflect on the concerns to which the Minister in the House of Lords referred and which were described as an inflexible tick-box approach? What particular aspects persuaded the hon. Gentleman of the change? He made some brief allusions in his opening remarks but he did not give us the full explanation. It would be helpful for us to understand the reasoning behind the decision. As the Minister is aware, the Opposition expressed continuing concern in the other place that amendments may still not cover the irresponsible granting of credit; for example, where customers are offered further credit facilities for the purchase of furniture, kitchens or other big-ticket items, despite already being able to borrow thousands of pounds on credit cards. The Government’s view is that the amendment will cover that issue as well as irresponsible lending. We hope that will prove to be the case. The Minister is no doubt aware of the latest concerns expressed by industry representatives about the lack of definition. Members from various parties touched on that earlier. Only yesterday, I received representations from APACS—an organisation that will be at the heart of the Bill’s implementation—that the lack of definition will give the OFT inappropriate power. Rosalind Sellers from APACS stated:"““This amendment gives the OFT powers to refuse credit licences based on an undefined concept of ‘irresponsible lending’. We strongly support the principle of making what has been implicit throughout discussion of the Bill—i.e. the need to curb irresponsible as well as unfair lending—explicit at this stage. However, we are concerned that, in practice, the lack of definition will enable the OFT to define its own powers and then enforce them without consultation.””" In previous debates, one of the Minister’s arguments for excluding the provision was that it would be difficult to reach a definition. It would not be surprising if the Minister said that part of the problem is as much of our making as his, given that we pressed for inclusion of the provision. However, as he has conceded to our request, it is his duty as a Minister of the Crown to ensure that the Bill is workable. That, in essence, is my concern. So will he tell us his plans for issuing guidance to the OFT and creditors on the definition of irresponsible lending?