Consumer Credit Bill

First, this amendment is not so much about parliamentary scrutiny as about laying down some general principles that the OFT should follow. I make the general point that it is a very different body from the FSA, which has extensive rule-making powers. Detailed rules for consumer credit, on the other hand, are made by secondary legislation, which is then subject to parliamentary scrutiny, so they are very different bodies. We have proper parliamentary scrutiny in the Bill already. The amendment simply duplicates provisions already in the Consumer Credit Act 1974 and the Enterprise Act. The way in which the OFT should act in regard to its consumer credit functions is set out in Sections 1 to 5 of the 1974 Act. That includes keeping under review the Act and the relevant social and commercial developments; enforcement and working of the Act; production of information and advice; and annual reporting obligations on the operation of the Act. The Consumer Credit Act provisions also need to be read in conjunction with some of the general provisions in the Enterprise Act, in particular those relating to corporate governance and the Office of Fair Trading board; the requirement for an annual plan and report on which stakeholders, including ministerial departments, are consulted; and the OFT’s more general functions which are set out in Sections 1 to 8 of the Enterprise Act 2002. Notably, a,"““Minister of the Crown may request the OFT to make proposals or give information or advice on any matter relating to its functions; and the OFT shall, so far as is reasonably practicable and consistent with its other functions, comply with the request””." Ground rules for the way in which the OFT operates were laid down when Parliament debated and passed the Enterprise Act in 2002. The OFT is also subject to the usual range of accountability measures, such as National Audit Office scrutiny and appearances before House committees. Therefore, in general, it is difficult to argue that there is a lack of parliamentary scrutiny. The amendment suggests that there are concerns about the burdens that may be imposed on business and how that will be constrained. However, the OFT is under an obligation to act proportionately as a signatory to the Cabinet Office Enforcement Concordat, where it is committed to minimising the cost of compliance for business by ensuring that any action it requires is proportionate to the risks, and taking account of the circumstances of the case and the attitude of the operator. So the OFT is already required to do what is proposed in this amendment. A final point was how this relates to Hampton. The Hampton footnote has been considered separately from the main Hampton recommendations and we shall be consulting in the first half of 2006 on that point. On the basis of that explanation, I hope that the noble Lord will be prepared to withdraw the amendment.