Consumer Credit Bill

moved Amendment No. 32:"After Clause 42, insert the following new clause—"    ““OFT GUIDANCE    After section 183 of the 1974 Act insert— ““183A   OFT GUIDANCE (1)   No guidance is to be published under the 1974 Act without the approval of the Secretary of State. (2)   In preparing or revising guidance under that Act the OFT shall consult such persons as it thinks fit.”””” The noble Lord said: The amendment would require the OFT to produce guidance before the provisions on unfair relationships came into force, and is therefore concerned with ensuring greater certainty about what is meant by ““unfair relationships””. As we have already discussed, there is a lack of detail in the Bill; far too many of the significant policy areas have been left to secondary legislation and guidance from the OFT, none of which has been clarified by disclosures to date. That is unsatisfactory and will create uncertainty not only for business, but for consumers. In addition, Parliament will be denied an opportunity to consider vital detail. As the Bill is drafted, the detail of key features is left to be developed by the OFT, an agency over which the Government have limited ministerial control, and in an area where it is also the regulator. As a result there is a danger that the OFT may become both judge and jury in these matters. The proposed new clause in the amendment seeks to address the issue by requiring that approval is obtained from the Secretary of State before OFT guidance is published, and that the OFT consults relevant parties on the content of that guidance. That builds in essential safeguards, by enabling the Secretary of State to ensure that the OFT acts in accordance with Parliament’s wishes, while not interfering with the detail of that work, and ensures that those affected have the chance to influence the OFT’s direction before it is set in stone. The Minister in the other place said that, in his view, the proposed new clause would undermine the independence that Parliament gave to the OFT under the Enterprise Act 2002. That independence may have been attractive to legislators at the time, but matters have changed with this Bill and with Hampton. I mentioned earlier the extensive array of new and far-reaching powers that the OFT would have, and I shall not bore Members of the Committee again with a list of them. Those and other aspects of the Bill would make the OFT a different regulator from that before Parliament when it considered the Enterprise Bill—a regulator with inappropriate powers. Accordingly, I beg to move.