CONSUMER CREDIT BILL [LORDS]

HC Deb 17 June 1974 vol 875 cc45-92

Order for Second Reading read.

4.12 p.m.

The Minister of State, Department of Prices and Consumer Protection (Mr. Alan Williams)

I beg to move, That the Bill be now read a Second time.

I was very tempted to say "I beg to move, That the Bill be read yet again", since so many hon. Members have traversed this ground on several occasions. I have a suspicion that by the end of the afternoon certain hon. Members will be regretting the fact that I am not amongst those who suffered the loss of their notes and papers in today's incident. I still have the notes of my speech.

In revising the Bill I have tried—I will not put it beyond that—to accommodate criticisms made on both sides in the Standing Committee in the last Parliament, and also to incorporate improvements where it was indicated that these could be introduced without harm to the consumer. I have had the fullest discussions with interested bodies, including, of course, the Consumers Association; they have been kept fully aware of the main changes we envisage.

From the point of view of setting the background on this side of the House, it is gratifying to note that as the previous Labour Government set up the Crowther Committee to analyse the consumer credit industry we now have the opportunity to implement the findings of its report.

I want immediately to pay tribute to hon. Members on both sides of the House who last year and earlier this year did so much work in bringing forward and scrutinising the framework of the previous Bill. This new Bill has already passed through its stages in the House of Lords. Indeed, basically it has already once passed through its stages in Committee in this House. I therefore hope that we shall, with co-operation from both sides of the House—in so far as it is meaningful to talk of sides of the House on what is, in a sense, an all-party Bill—see this piece of legislation on the statute book by the end of July.

The basic philosophy of the Bill is well understood by most hon. Members. Fundamentally, although it is a long Bill, the essential requirement of flexibility in construction has been achieved. We are dealing with an industry which has shown considerable volatility over the last 10 years, and many new types of credit exist which did not exist at the beginning of the decade.

In preparing a legal framework, we have to devise one that is capable of dealing with the rate of change which the industry has demonstrated itself to be capable of. We want the Bill to control credit as a whole, not one particular type of credit, such as hire purchase, or just one particular class of person, such as the money lender or the pawnbroker. Similarly, we want identical protection as far as possible for all debtors.

We want to give greater equality in bargaining between the debtor and the creditor, and we believe, as did the Conservative Government, that we can achieve this greater protection and this greater equality in bargaining only by establishing greater truth in lending. Through truth in lending, we hope that we shall have open disclosure of all the terms which are involved in an agreement. We hope that this will make for true competition and will avoid some of the grosser examples that we have had of interest rates in the last few years.

Only recently The Sunday Times quoted the fact that in purchasing certain older second-hand cars today many purchasers unwittingly are paying as much as 45 per cent. interest. Radio Stoke, reporting a survey conducted by the BBC's local radio stations in Derby, Nottingham and Stoke, disclosed towards the end of last year rates of interest of up to 111 per cent. We believe that if we had truth in lending, if we had fuller disclosure, these extreme rates would not be possible.

Similarly, the Bill recognises the fact that the market in hiring is a meaningful alternative to borrowing. and, therefore, as far as one deals with the problems, facing the consumer in relation to borrowing one also has to deal with the problems in relation to hiring. Equally, we accept that ancillary activities—the activities of brokers, debt collectors, credit reference agencies and so on—must also be brought within the framework of legal control.

Finally, we repeat the decision of the Conservative Government in saying that the laws in relation to exorbitant interest need to be strengthened. Under the present law, until the rate is over 48 per cent. the onus of proving that the rate is extortionate rests on the debtor, and for most debtors this is an extremely difficult, if not impossible, task to undertake. Therefore, as in the Conservative Government's Bill, at all levels the onus of proof that any given rate of interest is not extortionate will be vested in the lender.

We believe that in fulfilling the principles which I have outlined as underlying the Bill we shall be achieving a major breakthrough in consumer protection. I want to take this opportunity to pay a completely wholehearted tribute to all the officials—one in particular—who have been so involved, not just for months but literally for several years, in the preparation of this highly complex piece of legislation—complex because it must be complex if it is to be comprehensive. Because of its complexity, I took the unique step of inviting hon. Members opposite who I knew were likely to take part in the proceedings on the Bill to a teach-in with officials from the Department. Indeed, I extended the invitation to the Liberal Party as well Hon. Members have thus had the opportunity to discuss the details of the legislation with officials, with no Ministers present. I hope they found it helpful, sufficiently so to be able to help me when we reach Committee. I am still somewhere in the middle of the morass.

Although hon. Members may now be fully conversant with the intricacies, niceties and subtleties of this legislation following the teach-in, I have to bear in mind that for some people outside the Chamber today's proceedings, as recorded in the OFFICIAL REPORT, will be their initial guide to the intentions of the legislation. I hope, therefore, that hon. Members will excuse me if I take the opportunity of going into some detail on the provisions of the Bill.

Under Part I certain duties are given to the Director General of Fair Trading. I will deal with those in a moment. He is responsible for administering the licens ing system and for adjudicating cases under it although there will be an appeal system. He also supervises the working of the statute, advising and informing the Secretary of State of developments. All of those functions are important if we are to have effective enforcement of the legislation and if the Secretary of State is to be able effectively to operate the powers which he has to vary the legislation.

I recognise that changing from the independent credit commissioner to the Director General of Fair Trading for this new function is a value judgment, and a closely balanced decision. My predecessor, to whose work in this respect I have always paid tribute, came down in favour of the independent commissioner. In opposition I argued in favour of the Director General carrying out these functions. I feel I owe it to the House to explain why I sought to make these changes.

When the Crowther Committee made its report and recommended the establishment of an independent credit commissioner, it did so thinking in terms of a much larger Bill going beyond consumer protection and covering lending and security, not included within the scope of this Bill. The Crowther Committee made its report before the Director General of Fair Trading existed. We felt that the Office of Fair Trading created a completely new situation in consumer protection which had to be taken into account.

As hon. Members are only too well aware from the instances they have raised here, malpractices concerning credit are very often concurrently malpractices affecting goods and their sale. It would be confusing if complaints had to be dealt with by two different offices. Not only that, it would be inefficient. Weights and measures inspectors would have to some extent to duplicate their work in putting their submissions to the credit commissioner as well as to the Director General. Further, there would be duplication of staff. We believe that there will be a modest saving, which I am sure will be applauded by all, arising from the change we have made.

There will now be 10 fewer staff required and there will be a saving of £25,000 annually. There will, however, be no reduction in the status of the person who will be undertaking the work. He will be working within the Office of Fair Trading but the appointment will be at the same level as that originally envisaged for the independent commissioner. We may be presumptuous or optimistic but we believe that as a result of the explanations given to the groups which previously resisted such a move we shall have dispelled many, if not all, of their fears.

Mr. John Gorst (Hendon, North)

The hon. Gentleman said that the status of the person who will undertake the job which would previously have gone to the commissioner but which will now go to a person responsible to the Director General will not be changed. Surely such a person would be answerable to the Director General and consequently to that extent will be more junior than the projected commissioner.

Mr. Williams

I looked at this and I accept that it is an argument that can be put forward. Equally, in the other sense it can be said that such a person gains something from having the additional weight of the Director General to assist him. Since under the licensing provisions one of the requirements is that the responsible person has to take into account the total fitness of a person to be licensed, it seems appropriate, as the Director General is responsible for collecting information on general abuses relating to commerce—he has the best collecting machine—that all the information required to decide whether licences should be granted, varied or revoked should be held in one place.

Mr. Gorst

I welcome the changes which the Minister is making. If I gave the contrary impression I did not mean to. Does this not also imply, and if it does it would be good, that there are effectively two appeal procedures, through the Director General and through the appeal machinery which the hon. Gentleman has put into the Bill?

Mr. Williams

The appeal procedure is that which I have put in. I would not want to mislead the hon. Gentleman by suggesting that I see the system as having its own in-built appeal procedure. I will deal with the appeal procedure later because the hon. Member, like myself and the hon. Member for Gloucester (Mrs Sally Oppenheim), was concerned that whoever was to be at the head of this body should have someone looking over his shoulder to ensure that he carried out his functions fairly.

Part II sets out the scope of the Bill. It covers credit at a personal, non-corporated level where the loans are of less than £5,000. It also covers hiring. There are various definitions of the types of transaction. We wanted the minimum number of exceptions. We therefore confined these exceptions to those areas where conformity with the Bill would be unnecessarily difficult and disproportionately expensive in relation to the gain the consumer stood to make or where protection already existed, for example, in relation to house purchase through local authorities or building societies.

The Secretary of State also has power to exempt agreements with very low rates of interest. It will be our intention to use that power. We shall be having discussions with trade and consumer bodies on the precise level at which this should be set. There are certain complications in relation to credit unions and so on which have yet to be fully discussed.

The Secretary of State also has power to exempt agreements where the payments are by a small number of instalments. Here we mean where there is a deposit and then fewer than three instalments. Clause 17 defines a small agreement as one involving an amount below £30. Conservative Members who were on the Committee will remember that we had considerable discussions about this. In Committee we varied the original Bill. Following the last Committee stage I had consultations with the Consumers Association and various trades involved.

Since coming into office I have repeated those consultations. There was agreement with the Consumers Association that, if the amendment as originally carried in Committee were to stand, the impact on the check and mail order dealers would be such that costs would be substantially increased and, therefore, the cost of credit to people borrowing low levels of credit would be unnecessarily high. There was also a danger that we might eliminate these sources of credit for people who may have no other alternative source. Since the Consumers Association shared our concern, I have accepted that we will return to the figure of £30. I want it to be quite clear that the figure of £30 does not mean that there is an exemption from all provisions of the Bill.

As for truth in lending in advertisements, there is no exemption in the Bill. The White Paper produced by the previous administration envisaged that there might be exemptions from full disclosure on less than £10. This was to be the subject of consultation. I am still to have those consultations. It is a regulatory power which the Secretary of State will have, and in the light of those discussions we shall decide whether a £10 limit or some alternative figure should be introduced.

As for truth in lending in agreements, exemption is only for unsecured credit for goods and services. We are trying to help the mail order trade and the check traders. Disclosure of information will be required there under Clause 55. But we believe that this can be achieved on existing documents at minimum cost. There will be no exemption from these provisions for small cash loans, for secured credit purchases or for hire purchase and conditional sales.

As for the cooling off, there is no exemption, except again for less than £30 unsecured goods and services. This again is to try to help the mail order trade and the check trade and to enable them to continue in operation. This is an area of informal trade. But if there is abuse, under Clause 182 there is power to lower the limit, and I should not hesitate to do so if I found that there was abuse. Similarly, those traders in this sector will bear in mind that the Director General will take account of any abuse of the extra freedom given here in application for renewals of licences.

Part III deals with the licensing of creditors and hirers. With two exceptions which I will not go into at this stage, all will need a licence. This may be either a standard licence to a person, a partnership or a company, or it may be a group licence, so that the Director General could decide initially to issue a group licence for solicitors. It will be the duty of the Director General to establish that the applicant is a fit person to hold a credit licence. He will take into account any history of fraud, obviously, and such matters as discrimination on the grounds of colour, race or sex. The hon. Member for Gloucester will recall the battle which she and I fought against certain of her hon. Friends in Committee who felt that discrimination on the grounds of sex was legitimate in granting credit.

I find it humiliating to think that women who are perfectly creditworthy are compelled to seek the signature of a husband or some other man before credit is available. On 9th January the Daily Telegraph quoted a case under the heading Giving women credit where credit is due". It spoke of an ex-Member of this House, Mrs. Patricia McLaughlin, who, incidentally, is an executive member of the Housewives Trust, and who tried to under-take a hire-purchase deal in Oxford Street. Even though she pointed out that she was in business in her own right, she was told that she was still expected to produce her husband's signature. Fortunately, she was not only persistent but knowledgeable, and eventually she managed to prevail. But for a great many women it is extremely embarrassing to have this sort of condition imposed and this sort of confrontation unnecessarily facing them when they want to undertake a normal purchase.

Under Part III, the Director General will be able to vary, suspend or revoke a licence.

We introduce new provisions for appeals in this part of the Bill. Hon. Members on both sides of the Committee were worried about the absence of an appeals procedure since it could mean for many firms that they would perhaps go out of business if licences were taken from them or were not initially granted. We have tried to accommodate that concern by giving under Clause 41 a right of appeal to the Secretary of State, and there is also a right of appeal to the High Court on a point of law under Clause 42.

Part IV regulates the conduct of creditors and hirers when seeking business. The aim is to ensure open and honest negotiations and, therefore, it tries initially to regulate advertisements. Clause 44 makes it mandatory on the Secretary of State to produce regulations on the form and content of advertisements. Even building societies, which are exempt from other parts of the Bill, must conform to these advertising regulations.

The same clause also debars the sending of circulars to minors. It may at a later stage be necessary to discuss whether certain amendments to those provisions will meet some of the worries of the industry. We think that they will.

The mass mailing of credit cards is also debarred. Hon. Members will recall the justifiable fuss that there was in October 1972 when, according to the Daily Telegraph, the Access card was sent to 3,400,000 customers. The banks have indicated that it is unlikely that such an operation will be repeated, but we cannot be sure that it could not be repeated in relation to credit cards or some similar items, and, therefore, we take powers to debar it.

Also under this part of the Bill we extend the truth in lending provisions by requiring that written quotations of terms must be provided when a deal is undertaken.

Part V protects the consumer when entering into agreements. It requires full disclosure in the prescribed manner of specified information before an agreement is made. It also introduces a cooling-off period for second mortgages. There will also be, under Clause 67 and subsequent clauses, a cooling-off period for other credit deals which are signed away from trade premises after a visit by a salesman. It will be mandatory on the Secretary of State to produce regulations on the form and content of documents.

There are certain exemptions from Part V. The first of them concerns non-commercial agreements between, say, friends, rather than the normal commercial loan, overdrafts where the Director General so determines—a matter which I know concerns the hon. Member for Hendon, North (Mr. Gorst)—and small agreements under £30, by which is meant unsecured loans for the purpose of goods and services but not cash loans. Cash loans will not be exempt.

Mr. A. P. Costain (Folkestone and Hythe)

There is a tendency now for people to lend charities money free of interest, so saving tax, and so on. If anyone loans even a substantial sum to a charity on an interest-free basis, are we to take it that such a transaction will not be caught by the Bill?

Mr. Williams

The hon. Gentleman has raised a point to which I have not directed my mind. However, I said earlier that it was our intention that arrangements whereby loans were made at a low rate of interest or below a certain rate of interest would be exempt. Therefore, my initial reaction is to say that the instance the hon. Gentleman puts forward, where there is no interest at all, will be exempt from the Bill. I will look into this. If it appears before the Committee stage that there is a problem here, I shall see whether we can accommodate the hon. Gentleman. If he has a specific instance in mind, perhaps he will let me have a written note about it as soon as possible, and I shall see what can be done, bearing in mind that the Bill will be going to a Standing Committee fairly soon.

Part VI deals with matters which can arise during the life of an agreement. Clause 75 is important because, where the supplier of goods or services has an arrangement with a supplier of credit, they are to be jointly liable for any misrepresentation or breach of the contract. Hon. Members have raised many instances of the kind of heartbreak situation which can arise from this type of abuse.

In September 1972 the Daily Mirror referred to the case of a labourer who bought a freezer for £166.87. He never had the freezer, but he was asked to pay the £166 because he had entered into a credit deal which was completely separate from the purchase. He said that one never dreamed that that kind of thing could happen in England. Unfortunately, it can happen in England, Scotland, Wales and Northern Ireland. It happens now, as the current edition of Which? demonstrates, because that edition refers to a lady who bought a shower from Gemini Engineering for £175. The shower never worked efficiently. When she tried to get redress for it she was told that Gemini had gone into liquidation. When she contacted the source of finance, the bankers told Mrs. Matthews that they could not be held responsible for the quality of the goods.

I am sure that hon Members on both sides will agree that it is wrong for shady, in some cases negligent or perhaps not terribly efficient, traders to be able to shelter behind often the good name of a finance house and therefore to give people a false feeling of security because they believe they are dealing with a reputable finance house when, in fact, their main deal is with a trader of little standing. It is also right that finance houses should accept certain responsibility to check the bona fides of those whom they allow to advance credit in their names. There will be several exceptions. I will not go into too much detail because hon. Members are aware of them and I want to get through the introduction of the Bill reasonably quickly.

This part of the Bill also deals with the limit of liability where a credit card is lost and prevents a creditor, in a situation which is not all that normal but occurs frequently enough to disturb the House, seeking quicker payment upon the death of a debtor.

Part VII deals with the problems that arise as a result of default by the debtor or when the agreement is terminated. This part of the Bill creates several important new rights. First, a default notice will be required before an agreement can be terminated, before early repayment can be required, or before goods can be repossessed. This is an important system of notification.

It also repeats the new statutory right in the original Bill for a rebate of charges where there has been early completion of a credit agreement. The formula will be decided, as before, by regulation.

The right in the Hire Purchase Act 1965 to terminate and return goods if half the total cost, including credit charges, has been paid is repeated in Clauses 100 and 101.

An important new right relating to hiring is provided in Clause 102, where a break clause is built in to terminate hiring agreements after 18 months. But, as indicated in Committee and on Second Reading of the previous Bill, concern was expressed that, while helping the consumer generally, this should not become a measure which prevented small businessmen from obtaining the additional access to capital that a hiring agreement can give them. Therefore, we have tried to ensure that businesses are not adversely affected. Since coming into office I have discussed this matter with the Smaller Businesses Association Limited, and it seems happy that no problem arises at this stage.

Finally, on Part VII, when a debt is cleared the debtor can have a certificate which may help to clear up troublesome disputes about future credit worthiness.

Part VIII deals with the giving and taking of security. The basic premise is that if someone gives security and subsequently becomes responsible he should have the same protection at no more onerous terms than those which existed in the previous agreement.

The enforcement of second mortgages will be possible only on an order of the court.

Part IX deals with judicial control and makes the important point that it may be possible for the court to declare that agreement, although defective, may still be enforceable as long as it is convinced that it will not prejudice the interests of the debtor.

The provisions relating to extortionate agreements are contained in Clauses 134 to 142. I intimated earlier what was intended here. Hon. Members will know from our previous discussions what is involved.

Part X is very important because it brings in ancillary credit businesses: credit brokerage, debt-adjusting, debt-counselling, debt-collecting and the operation of a credit reference agency—the so-called black list. All these matters will be covered by the legislation. Hon. Members who took part in the previous proceedings will recollect that we were particularly concerned that, in relation to black lists, where a fault exists it should not only be remedied, but that those who had been falsely advised of the poor creditworthiness of someone who had a false record at a credit reference agency should be notified of the change. In other words, the creditworthiness should be re-established with those to whom the previous error had been notified. We shall be able to meet this requirement by regulations under Clause 149(2).

Part XI makes the Director General of Fair Trading jointly responsible with the weights and measures authorities for the enforcement of the Bill which closely follows the provisions of the Fair Trading Act.

I draw the attention of the House to Clause 182 in Part XII, which gives power to vary the financial limits of the Bill by order. The more important of the changes can be made only by positive resolution. The negative resolution procedure will be for less important changes.

Before moving from the details of the Bill, I should like to consider the position in Scotland. Some people have suggested that there should be a separate Bill for Scotland. I do not accept that that is necessary in this instance. The Bill applies equally to England, Wales, Northern Ireland and Scotland. This decision was supported by the Law Society of Scotland.

There are good reasons why in this case a unitary Bill is suitable. After all, consumer credit is provided on a United Kingdom basis by firms operating on that basis. All citizens, regardless of the part of the United Kingdom in which they reside, should have the same protection.

Secondly, much of the teeth of the legislation will be provided subsequently via the regulations to be made by the Secretary of State, and it is essential that those regulations should be uniform and common to all parts of the country.

Thirdly, the Director General, who will be in charge of the operation of the legislation under the Fair Trading Act 1973, also operates on a United Kingdom basis. It would be anomalous if he had to administer one section of consumer credit differently from the way that he administers another.

The Scottish provisions were drafted by Scottish draftsmen—and. therefore, I can disclaim all responsibility for them—and consultations took place with various interested Scottish bodies. The anomalies between England, Wales and Scotland about the implied terms and conditions which led to the separate 1965 Act were eliminated under the Supply of Goods (Implied Terms) Act 1973.

A further point about Scotland is that Scottish appeals to the Secretary of State will, in general, be held in Scotland. Similarly, appeals relating to Northern Ireland and Wales will be heard in those countries. This will be achieved not by a statutory provision but by administrative flexibility. An appeal on a point of law may be heard where the appellant has his principal place of business or where his company is registered, and, therefore, the appeal could be heard by the Court of Session in Scotland.

There is one specific problem concerning Scotland which we raised in Com mittee and which I should like briefly to draw to the attention of the House, and that is the question of the rental purchase of a house. One way round the controls over rents in Scotland is by what appears to be the hire purchase—or rental purchase—of a house. This is all too common in many parts of Scotland, and the practice has been brought to my attention by various Scottish Labour Members. The matter is now covered by the Bill.

All too often this system applies to cheaper houses in redevelopment areas. Under the Bill, these arrangements will be subject to the protections which I am sure the House will find acceptable. The resident—or the tenant, as he should be called—will be told the cost of the credit, be able to obtain a copy of the contract, be able to avoid extortionate provisions and be entitled to rebate charges.

We hope to implement the legislation as rapidly as possible, and with that in mind it is probable that before the Bill receives the Royal Assent, we shall start advertising certain of the senior posts in the hope that people will be ready to take up their offices as soon as Parliament approves the legislation. As the right hon. and learned Member for Surrey, East (Sir G. Howe), who first introduced the Bill, intended, we shall have to introduce this measure part by part because of the difficulties of computer programming, reprinting documents, and so on, but we shall ensure that there is no unnecessary delay in its implementation.

There is no doubt that areas of difference remain. The hon. Member for Hendon, North will no doubt refer to the position of the banks. On the question of overdrafts, we think that we have to a large extent met the objections of the banks, or will do so by amendments in Committee, and I know that the hon. Gentleman will give us a chance to consider certain amendments which he will propose.

What we cannot offer to accept is the case put forward by the banks that loans other than overdrafts on current account should be exempt from the provisions of the Bill. I say that because these loans have to be separately negotiated and they are accounted for in a separate account. If we were to exempt them we should erode to a considerable extent the protection that we are providing, and that could lead to a change in the pattern of credit granting in order to take advantage of any loopholes.

Mr. Gorst

I take it that, despite what he has just said, the Minister is still open to argument and persuasion and has not totally closed his mind.

Mr. Williams

My mind is never totally closed on matters of this sort. Where there is an area of dispute, there is always more than one point of view. I want to preserve protection for the consumer, but the last thing that I want to do is to inhibit people from taking advantage of the range of credit facilities that we have in this country. All too often it is difficult to reconcile the two needs. If the hon. Gentleman can find a reconciliation which I have failed to find I shall gladly listen to it, and if it meet) our requirements I shall accept it.

Mr. Gorst

The door is still open?

Mr. Williams

Yes, but I cannot see a great deal of light through the gap.

We have made various concessions to the mail order traders. We shall discuss their requirements in Committee, and I shall, therefore, not go into detail about that now.

Credit reference agencies are the other sector about which there is likely to be a certain amount of dispute. I know that the hon. and learned Member for Runcorn (Mr. Carlisle) has certain points which he wishes to raise, and, in view of the respect which he commands on both sides of the House in these legal matters, I shall listen closely to what he says. I find it difficult to accept the submissions that are being put forward. All too often, if the source of information were not to be revealed it would mean that the information could not be revealed because the information itself would reveal the source. However, that is a nicety which we can consider further in Committee.

We want to provide the maximum amount of reasonable protection for the consumer, consistent with the survival of a fair and healthy credit industry, because that, too, is in the interests of the consumer. When in doubt, my inclination so far has been to favour the consumer, and that is fundamentally the philosophy of the Bill.

I feel no loss of face in conceding a point in answer to a reasoned argument, and I repeat that I shall listen to all propositions that are put forward, but I hope that that is not inviting a mass of amendments on every issue. I shall listen to arguments on the main points of the Bill. If the case put forward is a good one I shall take the appropriate action to meet it, but I must tell the House that to date I have had fairly intensive consultations about the provisions of the Bill. I hope that on the basis of that approach, if not on the basis of the rather lengthy introduction of the Bill, we shall have a reasonable, constructive and particularly amicable Committee stage.

4.57 p.m.

Mr. Paul Channon (Southend, West)

I do not think that I need detain the House for quite as long as the Minister did but I, too, must say how much I have been impressed by the work done by so many people over so many months in preparing this legislation.

Coming afresh to the Bill, I think that I can, on behalf of the whole House, echo the Minister's tribute to those hon. Members who gave this measure careful consideration during the previous Parliament and pay tribute in particular to the Members of the other place for their consideration of the Bill this Session. In a way, their deliberations have shortened our discussions because many of the points which would otherwise have had to be raised have been cleared up as a result of those debates and the consultations which successive Governments have undertaken with the various bodies involved.

I agree with the Minister's view about the aim of the Bill, which was first introduced by the Conservative Government. Much of the pioneering work was done by my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe), who was then the Minister for Trade and Consumer Affairs. To him goes the major share of the credit for the Bill, and I accept the Minister's view that the maximum protection should be afforded to the consumer, consistent with maintaining a healthy credit industry.

I thank the Minister for his courtesy to the Opposition in allowing us to discuss with his officials some of the extremely difficult technical points involved. I am grateful to the officials for the extremely courteous, helpful and efficient way in which they were kind enough to help us last week. Opposition Members have received a great deal of help, and this will have the effect of shortening the proceedings.

It is pleasant for a change to welcome a measure which commands agreement from the whole House, although of course there will be points of detail and various differences to be taken up. The Bill was introduced by the Conservative Government in the last Parliament and was fortunately revived by the present Government when they took office. We would all like to thank—alas we can no longer do so in person—Lord Crowther, and his Committee, for their great work. The Bill will do great credit to both sides of the House of Commons and to Government in general when it becomes law.

The Bill has been round the course a great deal. It has had many hours of debate and many points have been disposed of. It is extremely important to have a truth-in-lending concept, which in a way is enshrined in the Bill, and that no concealment of the cost of credit should be allowed. It is right that building societies, for example, should be included in the part of the Bill dealing with advertising. It is important that people know what commitments they are taking on and that no one should be fooled through not knowing exactly what are all the liabilities of a particular commitment and what it will cost at the time it is taken on.

I am extremely glad that the Minister is taking measures to ensure that there is no sex discrimination. I have perhaps a personal interest here as I was particularly aggrieved that I was probably the only person in the country whose wife was sent an Access card while I myself did not get one.

There are a number of changes since the Bill was last before the House. The most important is that the Director General of Fair Trading is to take over the rôle of the credit commissioner, a post which was envisaged by my right hon. and hon. Friends when we were in power. On balance, my right hon. and hon. Friends and myself welcome this change in the Bill. We have been considering this point for some time and now that we have seen the initial operation of the Director General of Fair Trading, in particular the excellent work of the present and first occupant of the post, we think it a good idea that he should take over the rôle proposed in the Bill. I am sure that both sides of the House would at this stage wish to pay tribute to the initial work of Mr. Methven.

However, one or two questions have to be asked on how this post is to operate under the Bill. I shall make a number of points but not, I hope, at excessive length. If they cannot all be answered in this debate, they will serve to put the Government on notice regarding some of the points we shall raise in Committee.

It appears that Clause 2 of the Bill gives the Secretary of State power to give the Director General of Fair Trading general directions as to how he should carry out his functions under the Bill. That seems a perfectly reasonable and normal use of the powers which one would expect the Secretary of State to have in such a situation. However, the Secretary of State is also accorded specific functions. He can give specific direction on any matter connected with the carrying out by the Director General of his functions. That is a very wide power.

If the Director General is to be an independent person, as all hon. Members wish him to me, and to be truly independent of the Government of the day in the sense which we all envisage him to be, how can that be reconciled with the Secretary of State being able to give him specific directions on any matter connected with the carrying out of his functions"? We want clarification on this point. Is it necessary and, if so, what are the eventualities in which the Government think such directions would be needed? I had always assumed that the Director General would be independent in general terms although I imagine that he will make reports to the House from time to time. How will the Director General's independence be guaranteed if these powers are given to the Secretary of State?

We also need more details on how the Director General's staff will be appointed, what the size of the staff is likely to be, and when there will be a full staff so that the work can begin. I understand that the Director General's staff will be found by him through the processes of the Civil Service Commissioners. Perhaps this is a normal way of proceeding, but I want an assurance that it would in no way prejudice the independence of the staff working for the Director General either in his rôle as Director General of Fair Trading or in his new capacity as credit commissioner, a title which I think will be dropped. He will be known merely as the Director General of Fair Trading and will administer the provisions of the Fair Trading Act as well as this Bill.

It was argued in another place, somewhat perversely, that the Director General ought to have a deputy concerned with consumer trade with whom he could disagree from time to time. My right hon. and hon. Friends would not put that proposition forward, but we want to know how the Director General is to operate.

Part II of the Bill deals with a number of extremely important definitions of terms in the Bill. These terms are extremely difficult for the layman to understand, but we all greatly welcome the fact that powers are being taken to govern the seeking of business and entry into credit or hire agreements and that there will be provision for the withdraw from or cancellation of certain agreements. These proposals are absolutely right and I am sure that both sides of the House welcome this concept.

I am well aware of the exigencies of parliamentary business at present and of the need to ensure that the Bill passes into law. I am sure that the Opposition will be co-operative, as we always are. Therefore, I hope the Government will agree that the door, which may be only partially open at present, will be pushed open a little further, in the interests of speedy progress, if there are matters on which we feel strongly and on which the Government regard it as not unreasonable, to meet us. The Government are not likely to be in power for very long, but if by mischance they are in power for a while do they have any plans to pursue what I might call Crowther Mark 2? I refer here to the recommendations of Crowther, which the Minister touched on in his opening remarks, dealing not with consumer credit but other matters. These are as equally important as those recommendations relating to consumer credit. Do the Government have any proposals regarding these other matters? When are we to see legislation framed on these points? Is there to be a White Paper? Have the Government considered how they are to proceed in this regard?

The Minister referred to the timing of regulations under the Bill. We all welcome these regulations and want to see them put into operation as soon as is reasonable. But we all recognise—I am sure that the Minister does—that the initial work on these regulations will provide a once and for all enormous burden for everybody involved in the industry affected by the Bill. The Minister gave a little information about timing of implementation, but we would like to know more about this either now or later. Let us assume that all goes well and that the Bill receives Royal Assent before the end of July. That might be cutting it a bit fine, but if there is Royal Assent in July, what will be the timetable for implementation which will presumably, have to take place in stages? How do the Government see implementation operating? Is there to be a list of events which will have to take place before the Bill comes fully into operation, and have approximate dates been set for each step of implementation to be taken? Information on this timetable would be of great interest to us and to people outside the House.

Some specific points about the Bill were raised in another place. Lord Jacques said that everyone welcomed the Bill in general but that in the end they felt that it should apply not to them but to everyone else. That is a common point of view. Nevertheless, some serious points have been raised. I was sorry to hear what the Minister said about loans on current account and the unlikelihood of his being able to meet the banks on that point.

This is all the more important because of the provisions in the Finance Bill under which, from the end of March next year, there will be no tax relief on overdrafts but there will be relief on loans on current account for qualifying purposes, which nearly always means house purchase below £25,000. It will therefore be important for the purchaser to be able to have a loan on current account rather than an overdraft. If nothing special is done for these loans—I understand that it is not intended to do anything at present—it will not matter to the banks but it will matter to the consumer. To take the Minister's own words, it is the consumer we should consider. If the Bill is too dogmatic and rigid, we should seriously consider altering it.

Someone could easily he told that he must find a deposit of 10 per cent. immediately or lose the purchase of the house. The only quick way of doing so under the Bill is an overdraft because a loan on current account will mean all the documentation and the seven days' cooling-off period. Also, he might bank miles from his home, as nearly a third of all people do.

Mr. Alan Williams

This is a valid point. I have read the clearing banks' brief. Clause 58 provides for exemption from the cooling-off period for home loans, so we are doing nothing that will inhibit the normal processes so far as time is concerned.

Mr. Channon

I hope that that is right. Clause 58 deals with opportunity for withdrawal from prospective land mortgage. If that means buying a house, I am interested to hear it, but it is not crystal clear. If someone buying a house is exempted from the cooling-off period, that is a help, but I do not see how anyone can interpret the provision in that way. I am sure that the Minister is right, but perhaps this could be considered before the Committee stage.

Mr. Gorst

Supposing that he wants to buy something else?

Mr. Channon

That will not matter so much unless it is for a qualifying purpose, otherwise relief will not apply either to an overdraft or to a current account loan. But this would be important if the purpose were a qualifying one. If that clause covers house purchase, I am grateful, although I am surprised that the banks have not noticed the point. I hope that the door will not be shut on loans on current account until we have fully debated those two clauses.

Another matter of concern to the banks, not surprisingly, is Clause 173 which provides that the bank can be bound by a mistaken bank statement. That struck me as being too good to be true. Speaking as someone who has never followed Polonius's advice— Neither a borrower, nor a lender he"— but who, practically all his adult life, has been a borrower, I thought that the the clause was designed particularly to benefit me. Do the Government intend that if a bank, by error, which can occasionally happen—it has never happened to me—sends a statement showing the customer in credit, although he knows that he is not, the bank should for ever be held to that?

The only let-out from that situation is an extraordinary one. Under Clause 169, in proceedings under the Bill, the person charged has a defence. I am told that the defence offered to the banks, that they took all reasonable precautions, is worthless. No doubt the Under-Secretary can give us the lawyers' views on that. I am told that if a slip is made it ipso facto means that the bank could not have taken all reasonable precautions and that therefore that defence is no defence at all. If that is so, it perhaps goes a little too far in the defence of the consumer. With the best will in the world, when about a billion items are cleared every year by the banks, there must be one or two mistakes. No one wants them to happen and if anyone is misled, the law offers a reasonable protection at the moment. Perhaps this matter can be looked at in committee.

A point with which my hon. and learned Friend the Member for Runcorn (Mr. Carlisle) will want to deal in more detail is that raised by some of the credit reference agencies about the information that they give about business, consumer and trade credit. They argue—the Minister will know the business to which I am referring—that business and trade credit is completely different from consumer credit. It is substantially a matter of trust that credit givers have a right to know as much as is reasonable about a customer's circumstances and background, and whether he has a good business record.

It is argued that in other legislation along these lines there has never been any attempt to secure reporting of this kind of credit. I am told that in Canada legislation to regulate the gathering of credit information specifically excludes this type. This applies in practically every province—certainly in Saskatchewan Quebec, Manitoba, Newfoundland, Ontario and British Columbia. Perhaps there is legislation in other parts of the world without this exemption, but it seems reasonable.

It is argued with some force that the Bill will mean that the two big reputable credit reference agencies will have to give not only their information about the people concerned but also their sources. It will therefore be extraordinarily difficult for people to give such information and it might make it more rather than less difficult for people to get credit. Up to now, if anyone has reported that someone's credit is good, that person has been likely to get credit. This provision is more likely to hit than to benefit the small trader. Perhaps this, too, could be considered before Committee.

A similar point is raised by the National Federation of Trade Protection Societies, who I hope have been in contact with the Department. That organisation is particularly worried because it is a group of mutual societies, all of whose members are bound not to reveal the information they receive to anyone outside the society. They are frightened that they will lose all their mutual status if the Bill is not amended, which they say can be done quite simply. I do not expect an answer tonight, but it would save time if this, too, could be considered before the Committee stage.

There are many more detailed points not normally appropriate to Second Reading, but in today's special circumstances perhaps I might mention one more. It relates to Clause 57. All of us agreed that it was wrong to have the mass circulation of credit cards that took place 18 months ago. No one wants that exercise to be repeated. It is quite right that powers should be taken in that respect. On the other hand renewal for those who have taken up credit cards will be very difficult under Clause 51 if it is not amended. The credit card com pany may well not know who has taken up the credit, because one takes it up if one has signed the document even if one never makes use of it. Unless the companies circularise 3½ million people, they will not know whether they are allowed to send them the renewal. I should have thought that something might be done to make this a law in the future, but perhaps not to insist on its being applied retrospectively, as it were, to credit cards which are already in operation. That is a small point, but I should be grateful if consideration could be given to it.

The Bill is welcomed on both sides of the House. As I have said, it was my right hon. and learned Friend the Member for Surrey, East who introduced its predecessor last November. That Bill had its Committee stage, and it was one of the minor tragedies of the General Election in February that it did not pass into law.

However, we are grateful that the Government have reintroduced this Conservative measure. It has not been amended very much. We welcome most of the changes. There are some points of detail to be considered, but, in general, we welcome the Bill very much and we wish to co-operate with its passage through Parliament. We believe that it is in the interests of the consumer and that it will help a great many people in the future. This reform is long overdue. Certainly we on the Opposition side of the House do not wish to delay it but support its passage with enthusiasm.

5.21 p.m.

Mr. Mark Carlisle (Runcorn)

The Minister of State said that the Bill was extremely complex. When I was a Minister I always noted that the attendance at any debate in the House by those willing to take part was usually in direct converse proportion to the complexity of the Bill under debate. The few hon. Members present this afternoon may confirm the complexity of the Bill.

I propose to be brief and to speak merely about one aspect of the Bill. The clause with which I want to deal has grown. When the previous Bill was introduced it was Clause 133. At one stage the clause number was in the 150s. In the present Bill it has now got as far as being Clause 160. Again, that is evidence of the complexity and the growing nature of the Bill.

In general, and before coming to Clause 160, may I say that, like my hon. Friend the Member for Southend, West (Mr. Channon), I welcome the Bill. It was a substantial achievement for my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) and the pressure that he brought for the introduction of the Bill during the previous administration. The present Bill will be of value to the public as a whole.

Referring to Clause 160, I am, to a degree, encouraged by the comments of the Minister, who said that he saw no loss of face in conceding a good point. I hope that he will feel that my few remarks will strengthen him in reconsidering the position under the clause.

My point is whether the provisions dealing with the rights of an individual to have access to any file kept about him by a credit reference agency—a proposal which I applaud and which was recommended by the Younger Committee on Privacy—should apply to what are known as retail credit agencies or consumer credit agencies. The question is whether they should also apply—as the Bill applies them—to commercial credit reporting agencies, that is, agencies which are reporting not on the creditworthiness of an individual but on that of a commercial undertaking. There is a strong case for saying that a distinction should be made.

I have been approached about this matter—it was not a form of financial approach or interest—and an argument has been put to me by the Manchester Guardian Society for the Protection of Trade. That society is extremely concerned about the effect on its business should the Bill pass into law in its present form. The society has existed for 147 years. It is a mutual, non-profit-making society. It exists to provide a service which it believes to be important. It is a service which has over the years, since the society's incorporation, become an even more important service—namely, that of providing reliable information about the creditworthiness of commercial undertakings. The fact that the society is providing a valuable service is recognised by trade and industry. That is clear from the fact that it has 10,000 members and receives about 600 inquiries daily. The Minister of State will accept the thoroughly reputable nature of the Manchester Guardian Society for the Protection of Trade.

Under the provisions in the Bill—if I read them correctly—as a result of Clauses 147 to 149, this society will have to be licensed. It welcomes that. In itself, that licensing is a protection to ensure that people who are not fit and proper people are not involved in these matters.

The provisions of Clause 160 allow an individual to obtain the whole file on himself that is kept by any credit rating agency. That provision relates to individuals. But commercial credit bureaux are providing creditworthiness reports on companies, and to that extent they are excluded from the effects of these provisions because those corporate bodies are not individuals under the clause. Presumably the clause was drafted in its present form because those drafting the Bill and those advising the Minister believed that it was right in relation to credit references made on the creditworthiness of companies that the companies should not need the same sort of access to that information as an individual should have to any comments made about him. Therefore, the Bill does not require files to be presented to commercial companies on which credit ratings are held.

Unfortunately, however, as I understand it, 30 per cent. of the work undertaken by the Manchester Guardian Society for the Protection of Trade is not in relation to corporate bodies as such but to non-corporate bodies—presumably either partnerships or individuals trading under firm names. The fear is that if under the provisions of the Bill those people are to be entitled to see not only what the Manchester society is saying about them in a statement of fact but also the whole file upon them, the sources of information upon which that service depends will dry up. As I have said, it is a service which provides something of value in the commercial world because it is a service which people believe helps to reduce the potentiality of fraud. The Manchester society believes that this service will no longer be provided if as a result of the Bill their sources of information dry up, as they fear.

I know that the Minister of State will not wish to do anything to encourage fradulent enterprise. He will know of the concern which exists about the potential for fraud in business—the type of thing still known as long-firm fraud, or the individual who sets up as a firm purely to obtain credit, with the clear and open intention of selling the goods and getting out before those who have given him credit can catch up with him.

The existence of societies such as the Manchester Guardian Society can help to prevent such bogus businesses. Such societies are the one focal point to which retailers' suppliers can write and inquire about the creditworthiness of a new firm. By such means retailers can smell that something is wrong and warn other companies before too much credit is granted to the suspect firm.

I understand that there are in all about 40 agencies which work in commercial credit, of which 28 are non-profit making. I gather that most of these agencies are concerned mainly with consumer credit but that they do a small amount of commercial credit rating as well. Some, such as the Manchester Guardian Society, deal only in granting commercial references and will refuse to give, even to a member, a reference about an individual rather than about a trading concern. One has to be a member to get a reference and these agencies will give references only to trade creditors.

These agencies are clear that, if the Minister will meet them on this point, they can decline—they do decline, and they will decline—to give any information about a non-corporate individual unless the inquirer is prepared to state the nature of the inquiry and to show that what is involved is the trade the individual is carrying on and not the individual's personal life.

The Minister will know that such agencies draw their information from a wide range of sources. I ask the Minister of State to say that a distinction can be made and should properly be made between agencies dealing in what is generally called retail consumer credit and those such as the Manchester Guardian Society which deal purely in commercial credit references.

The basis on which I ask the Minister of State to say that in principle a distinc tion can and should be made—I believe that it would be a valid distinction—is that, in approaching any legislation of this nature, the Minister should balance the evil which the legislation attempts to rectify against the possibility that carrying the legislation will provide greater opportunities for other types of fraud to take place.

The balance comes down clearly on the side of allowing individuals to know exactly what is said about them and who is saying it. I appreciate that the Younger Committee recommended that this should cover business agencies as well, but it is noticeable that this recommendation was within the context of a report about the invasion of privacy. The very question which was asked—"Would you consider that your privacy was invaded if you were asked a question about your creditworthiness when buying a washing machine?"—shows that it was that aspect of credit agency work with which the Young Committee was concerned. Although the Younger Committee took oral evidence from the British Debt Society, it did not approach any of the bodies concerned with the commercial side of credit references.

The risk of fraud on a large scale is not great when one is dealing with the desire of an individual to have a washing machine, for instance. But there is a substantial risk of harm to the individual from wrong information filed, as I gather it often is, under the individual's home address—on the address of the house—rather than on the name of the occupant. It is also an interference with his privacy.

In the commercial world the opposite conclusions apply. The risk of potential fraud by drying up such sources of information are far greater and far outweigh the danger that could exist and far outweigh any question of the invasion of privacy of a person who is carrying on a business enterprise. If a business person attempts to obtain credit on a substantial basis, it is not unreasonable that those whom he asks to give him credit should seek to check up on his references. It is necessary for them to do so in an effort to prevent fraud. If such checking up is to be of value in the commercial world it should be possible to do it in circumstances of complete confidentiality.

As my hon. Friend the Member for Southend, West said, the service is also of advantage to an honest firm starting in business. It is useful for such a firm to know that there is an utterly reliable group from which it can inquire as to the creditworthiness of a person seeking credit from it. It means that an honest firm just setting up in business is much more liable to grant credit than it would be if it could not obtain such information.

As these agencies have made clear to the Minister, they are not unwilling to disclose the contents of any written report, but they are worried about disclosing their sources of information. I do not know whether it is for either the Minister or I to judge whether they are right in saying that the fact that they had to disclose their sources of information would dry up their sources of information. Clearly they sincerely believe that that will be the effect of this legislation.

If that means that such societies will cease to be able to provide the service which they have provided in the commercial world over the last 100 to 150 years, there will be a greater potentiality for a fraudulent, bogus business to get going before it is discovered and there will be a great reluctance on the part of some firms to give credit to newly-formed unincorporated bodies, because they will not have the opportunity of adequately checking on them.

It is noticeable that in the various pieces of legislation in the different provinces of Canada this factor is recognised by specifically excluding commercial credit agencies from these provisions. It could be done in two ways. In Saskatchewan and Newfoundland it is done by providing that the Act does not apply to a credit reporting agency where the agency's reports deal only with industrial and commercial enterprises and are distributed only to such enterprises. In British Columbia and Ontario it is done by defining the consumer as a natural person, but that definition does not include a person engaging in a transaction other than seeking employment in the course of carrying on a business.

I ask the Minister to look at this point again before the Bill becomes law. I know that it is not a new point and that it has been raised before. I know. too, that the Minister has been good enough to have meetings with the various parties involved, and that since those meetings a senior civil servant from the Minister's Department has been to the Manchester Guardian Society to see how the system works. No doubt from that visit he is far better informed than I or any other hon. Member could be.

The whole purpose of societies or bodies such as the Manchester Guardian Society for the Protection of Trade is to promote trade in this country and abroad by establishing confidence between suppliers and consumers, and it would be a great pity if the Bill, the purpose of which is approved by all hon. Members in as much as it deals with the consumer credit agency as such, should by a misfortune do harm to a valuable service to industry and commerce by going into a wider sphere than is necessary. I hope, therefore, that the Minister will consider excluding the commercial credit rating agencies from the effects of the clause.

5.43 p.m.

Mr. John Gorst (Hendon. North)

I welcome the return of the Bill, which fell for reasons of which we are all well aware, and I hope that it will not suffer the same fate a second time. I particularly welcome it in its revised form. Many of the revisions would no doubt have been made if the Report stage had taken place sooner the first time around. I welcome especially the fact that the commissioner has now been replaced by the Director General of Fair Trading, and we are of course glad to see that the appeals procedure is included, as has been promised had the Bill proceeded the first time.

Many of the changes which were promised for Report stage on the first Bill are to be found here, although I am a little dubious about one in particular. which the Minister and I discussed before and which I remember describing as the "KGB clause". The Minister, speaking then from the Opposition side, said There is a serious danger of a massive intrusion into individual privacy in the clause as it is drafted."—[OFFICIAL REPORT, Standing Committee D; 5th February 1974, c. 618.] He was referring to Clause 163 which deals with right of entry, the seizure of documents, and so on.

I also recall that my hon. Friend the Member for Henley (Mr. Heseltine), who was then the Minister of Aerospace and Shipping, gave an undertaking that he would take another look at this issue. It is not apparent to me that the clause although slightly changed in another respect, curtails these excessive powers. I have no doubt that we can come back to this point in Committee, but I invite the Minister to have a look at it between now and then and to give us a reassurance.

I part company with some of my hon. Friends and with the Minister, as will be no surprise to him, on the question of sex discrimination. One of the things that bothered us in Standing Committee on the previous occasion was that while it was entirely acceptable in principle that there should be no sex discrimination, there is some fallout from the change. A husband is still liable for the debts of his wife—

Mrs. Sally Oppenheim (Gloucester)

Hear, hear.

Mr. Gorst

I know I can speak with complete assurance in saying that my wife has no intention of being responsible for my debts. There is not, therefore, total equality in this respect and there will not be until we change the legal provisions.

Mrs. Oppenheim indicated dissent.

Mr. Gorst

I appreciate the depth of feeling of my hon. Friend the Member for Gloucester (Mrs. Oppenheim) as she shakes her head with great vigour, but this is a point which needs to be considered.

I turn to the principles of the Bill, as enunciated by the Minister in another place when he moved the Second Reading. I have some concern about an emphasis which crept into his speech which I do not recall being present in discussion on the first Bill. The noble Lord said that it was usually the practice in legislation to find a nail and then hit it. He said of this particular piece of legislation, The first new principle of this Bill is that it is directed not at a class of persons or a type of activity but at an activity as a whole.… Persons who wish to deal in this activity will be covered by the measure, no matter what type of credit they are providing."—[OFFICIAL REPORT, House of Lords, 9th April 1974; Vol. 350, c. 1149.] With particular reference to the points made about credit references agencies, one of the shortcomings of that approach is that all the transactions are treated as bath water and several babies will be made to suffer as a consequence.

It is important that we should treat everything more on merit, even if that conflicts slightly with the principle, with the all-embracing attempt to leave nothing out. I noticed that particularly in what the noble Lord said about pawnbrokers, money lenders and banks all being treated alike. This crops up in the clauses relating to the clearing banks. Obviously we shall need further discussion about loans on current accounts in which there is a fluctuating day-by-day rate of interest. It is not comparing like with like to draw a line here without regard to whether we are drawing invidious comparisons and creating unacceptable anomalies—unacceptable not only from the point of view of tidyness or fairness but also from the point of view of the consumer's interest, irrespective of what may also be in the interest of the clearing banks.

There still remain certain minor but significant anomalies which were argued at an earlier stage and which still remain to be argued. My hon. Friend the Member for Southend, West (Mr. Channon) has mentioned, and the Minister clearly anticipates problems on the clearing banks on the subject of loans on current account, repayment on demand and mistakes in bank statements. But of course there are problems of the credit reference agencies. Small anomalies have also been brought to our attention by the Finance Houses Association and the Equipment Leasing Association, particularly on the question of consumer hire agreements, and no doubt we shall be dealing with that when we reach Clause 15. There is also the Access and Barclaycard problem.

Finally, there is a small anomaly which has been brought to my attention by the Business Equipment Trade Association, in which I declare an interest, with regard to the right in Clause 102 to terminate hire agreements. The difficulty relates to the starting date for an agreement. Under the Bill as it stands, 18 months after an agreement has been signed it will be open to someone to terminate it. But people acquiring business equipment, such as an internal telephone installation, may have to wait six months before it is installed. It is only when it is installed and working that payments will start. That leaves only 12 months for the supplier to recoup its cost. It is suggested that the Minister should consider a slight amendment to enable the date of signing or the date of installation of the equipment, whichever is later, to be the starting date. Those are small points, but they are no doubt of great significance to the people concerned. I hope that the Minister will consider them sympathetically.

With those reservations, I am sure I can say that we are all delighted that the Bill has received the priority the Government have given it. We wish it a speedy passage through the House, and early implementation.

5.52 p.m.

Mr. Geoffrey Dodsworth (Hertfordshire. South-West)

I first declare a number of interests in a narrow part of the Bill. I am a director of a merchant bank, and because of that I am managing director of many leasing companies of various forms and size. Last but not least, I am Vice-Chairman of the Equipment Leasing Association, and I am aware of some of the discussions and consultations that have been taking place over an extended period.

First, I should like to say how much the industry appreciates the constructive nature of the discussions. They have constituted a rewarding dialogue which has been helpful in producing a better understanding of the leasing industry and its problems. It is interesting that the industry was brought into this form of legislation almost by accident. By definition, leasing is more a commercial and industrial activity. The association was concerned to see that that should be clearly understood by those drafting the legislation.

Throughout the world leasing is going through a time of examination and reconsideration. I know from my discussions in various European countries that consideration is being given there to the way in which leasing should be controlled and monitored in the best interests of commerce, industry and the consumer. I recently discovered in Brazil that the Brazilians had been trying to produce leasing legislation for four years so that they could have a leasing industry at all.

What I am concerned about is that we should not have control and regula tion by accident. For example, a number of the articles regulating consumer credit in Europe apply to leasing. We should clearly understand the effect of the drafting of some of those articles.

The association and I clearly understood that there was a need for some partnerships and private individuals to be protected in their dealings on rental agreements. The association is happy that as a result of the consultation a satisfactory form of protection has been found.

We should understand what leasing is. It seems to our association that the essence of leasing is customer choice, which separates ownership from use. If we can achieve that definition in the final form of the Bill, that will be helpful in understanding its application and it will be a better protection for people who deal with the leasing industry.

Leasing is a commercial activity, not a consumer consumption activity. Therefore, we feel that the purposes of the Bill may be best served if a lease is defined as a hiring agreement where the goods are selected by the lessee before they are bought by the lessor, the lessor had no necessary connection with the supplier, and the goods are to be used in the business of the lessee. Although this is a narrow point, we are concerned to see that there is a clear understanding of the form of the lease compared with the hire purchase or rental agreement.

For example, we believe that the words in Clause 15, capable of not exceeding £5,000 would be better related to the cash price than the total value of the agreement or contract. I should like to give two or three illustrations of the difficulties caused by the present definition. I understand that it is likely to be an outset definition, relating to the outset of the contract. There would then be difficulty over a motor car lease, for example, containing a mileage clause, because it would not necessarily be capable of exact definition at the outset, and there would be a disparity of treatment, dependent on the use of the vehicle. It would be only at the end of a leasing that one would know its true size.

There are also leasing agreements with a corporation tax variation clause, allowing for different rates of the tax. It would therefore be more helpful if the definition of size related to the cash price rather than to the total value of the contract.

Thirdly, there are examples of the purchase of an asset by a lessor taking account of various grants. As I understand it, we are likely to have a disparity of treatment between an asset used and purchased outside a development area and one purchased or used inside a development area. That disparity would be overcome by referring to the cash price of the goods.

If those difficulties can be overcome, the industry would say that it is more than appreciative of the consideration and thought which have been given to the drafting of the Bill in its present form over an extended period. The industry looks forward to the consideration of amendments which we think might be helpful, particularly amendments to Clause 16.

5.58 p.m.

Mrs. Sally Oppenheim (Gloucester)

I had hoped to be able to say that the Bill had been universally commended by hon. Members on both sides of the House. Unfortunately, we have not heard from any back-bench Labour Member, so I can say only that [...]t has been unanimously welcomed by my hon. Friends, as it was when the former version was introduced by the previous Conservative Government.

This is a young Bill with a long history, a Bill that already owes a great deal to its heritage. I cannot imagine that many Bills which received so much consideration in advance can have come before the House for a Second Reading.

While I am on the subject of the heritage of the Bill, I should like to be associated with the tribute that has been paid to the late Lord Crowther. I am sure that the House would want to pay a tribute to my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe), the former Minister of Trade and Consumer Affairs, for the part which he played in the first incarnation of this measure.

The Bill comes to us after its former version had a long and constructive period in Committee. I think that I may say that it was all the more constructive because the atmosphere of the Committee was largely non-political and amicable—so much so that on one occasion I remember the Minister commending one of my amendments in preference to his own. On another occasion I remember being so seduced by the argument put forward by the Labour Opposition that I was prepared to vote with them had their argument been resisted. Happily, those matters have since been incorporated in the Bill, which has been substantially improved as a consequence of our debates in Committee and the assurances then given. More recently the Bill has had close study in another place and has benefited from a great deal of expert consideration.

The use of credit has become increasingly important in our society. Therefore, the rules that govern it must be fair and just. In many ways the problems in the realms of consumer credit have multiplied, intensified and become more diverse. The need for legislation is acute and the Bill is necessarily long and complex.

It is substantially an understatement to say that in many ways the complexity of the Bill and the complexity of the whole matter of consumer credit was brought home to many hon. Members, including myself, during the Committee stage of the previous Bill. It is perhaps the very best advocate of the need to guide consumers through the credit jungle and protect them on their way that we are dealing with such a long and complex measure. It has remained a reasonably faithful if an updated version of the Crowther recommendations. It deals with the problems in a comprehensive way and to a great extent it maintains a felicitous balance between users and lenders of credit.

I welcome the fact that the administration of the Bill will be in the hands of the Director General of Fair Trading, who has impressed all those who are keenly interested in consumer affairs with his capability and enthusiasm. There is a great deal in the Bill that is worthy of special comment and acclaim, but I shall not attempt to deal in detail with all its aspects. Nor shall I weary the House with examples indicating the need for legislation. Most hon. Members have been aware of that need as a result of the unfortunate experiences of their constituents. None the less, it is important to stress that the success and effectiveness of the Bill will depend largely on the nature of the regulations which are implemented, so that the fundamental principle underlying Crowther and the Bill—"truth in lending"—is fully exploited. I believe that the most significant manifestation of that principle will come in initial credit advertising and in the display of notices and catalogues.

It is crucial that the information which will have to be supplied by statutory disclosure is supplied in as effective a way as possible in informing consumers about the cost of credit and the terms and conditions to be imposed. Unfortunately, there are still a great many misleading credit advertisements. All too often the vital information is given, if at all, in tiny print at the bottom of the advertisement.

Once again, the Bill is faithful to the high priority that Crowther gave to the need for standard consistent formulae in the presentation of information. I fear, however, that the formulae that we discussed in Committee will prove too complicated for the average consumer, in which category I include myself. The information that consumers will want most despite the amount of other information that we may attempt to give them, is the cash cost of credit. That will be more readily understood by most consumers if, for example, Mr. and Mrs. Jones go to buy a washing machine on what is often genteelly described as deferred terms. What they will need to know, and in a way that they can assimilate easily, is how much more the washing machine will cost them to buy on deferred terms rather than to pay for in cash across the counter, the number of instalments, the amount of each instalment, the period of repayment, the total capital cost in cash terms and the penalties for early or late repayment. That is equally true for second mortgages and other credit transactions.

I do not in any way underrate the importance of the other information which will have to be provided, but I maintain that it will be the cash cost that will mean a great deal more to consumers than any amount of information about rates of interest. I hope that due prominence can be given to that aspect of the information which will be provided under the statutory provisions. The presentation of all information will be especially important, as will its prominence in relation to advertisements, notices, catalogues or in the agreements themselves.

Equally important is enforcement. I hope that the Minister will be able to tell us that he is satisfied that the trading standards offices are adequately staffed to deal with these matters, on top of the extra burden of work that they will have to carry as a result of the Prices Bill. As this information is to be collected centrally in his Department, I hope that the Minister will be able to give us some precise detail. It is no good legislating for consumers if we are unable to enforce the legislation.

I am still slightly concerned about some of the misleading and unfair billing practices which I hope will be dealt with under the relevant clauses. I refer in particular to a recent Barclaycard specimen statement which is called the "new-look" Barclaycard monthly statement. I am an optimist. The line which my optimism takes is to consider that I owe rather less money than in actual fact I owe, and that I am about to be paid more money than I actually am paid. I understand that this is a common delusion and a common form of optimism. I notice that I have a particular tendency to employ it in financial matters with my husband. However, it applies to other financial undertakings. The feelings of people like me can be imagined when they receive a specimen Barclaycard statement which says: Present balance £194.97. Credit limit £300. You need pay only £29. I am sure that that is extremely misleading and that someone of my optimistic nature would think that was a new form of accounting and late-crediting.

I know it is not the intention of Barclaycard to draw unsuspecting and unwilling consumers into credit transactions in which they had no intention of taking part. I think that the phrase could be amended to read, "You need pay only £29 if you wish to avail yourself of our credit facilities." That would clarify the matter. I hope that Barclaycard will amend the statement itself.

Apart from the practice of the unsolicited mailing of credit cards, which I deplore, I think that credit cards provide one of the cheapest forms of credit that can be found in Britain if effectively used, if payments are made promptly and if credit facilities are used for short periods only. I do not think that unfair billing practices are dealt with anywhere in the Bill, yet we must all have had the experience of constituents who are pressed for payment of accounts that have already been paid, who have received a number of harassing letters and who have written back on more than one occasion to say that the account has been paid.

I know that on most occasions it is the fault of the computer, but as the computer presumably does not answer the letters from people who say that they have already paid, it seems that errors are perpetrated because letters are not answered or not dealt with adequately.

It would not be right for me to let this occasion pass without welcoming the fact that the Bill, like its predecessor, will do away with discrimination against women—

Mr. Channon

And against men.

Mrs. Oppenheim

—and against race and religion in the realm of credit. All too often in the past this discrimination has been levelled unjustifiably against perhaps the most vulnerable group of women—women alone, single women, deserted and divorced wives, one-parent families—and, despite what my hon. Friend the Member for Hendon, North (Mr. Gorst) says, I hope that the Director-General will be harsh with any contravention of this requirement.

I also welcome a minor amendment to Clause 4, where the rather tentative "may" has been replaced by the more positive "shall" in relation to the Director General's requirement to disseminate information and advice to the consumer. If we need to inform consumers about the cost of credit, we need to educate them in its use. I am not sure whether the options in the clause are not still a little too wide, but we can deal with that aspect later.

I shall not detain the House by dealing in detail with other aspects of the Bill, which has been improved. My hon. Friend the Member for Southend, West (Mr. Channon) and the Minister of State have done that adequately. We shall want to look at the Bill closely again in Committee and possibly to amend it further.

My hon. and learned Friend the Member for Runcorn (Mr. Carlisle) raised a very wide and important point about consumer credit reporting. I hope that the Minister of State will look at this with the open mind that he assured us he has. My hon. Friend the Member for Hendon, North made a point which we have raised before—about consumer hire agreements—which is equally valid and reasonable. We were delighted to hear the expert contribution of my hon. Friend the Member for Hertfordshire, South-West (Mr. Dodsworth), and we look forward to his contributions, we hope, in Committee. We hope to be guided by his expertise in these matters.

This Bill has been, and was in its first incarnation, widely welcomed by consumer organisations throughout the country. It was welcomed in this House and in another place. I believe that it is potentially an extremely valuable measure for the consumer. It should do a great deal to banish the image of the usurious moneylender which all too often has been justifiably applied in the past. Like all good consumer legislation, it could have the effect of raising standards in the case of those on both sides of credit transactions, and it should add significantly to the growing number of consumer protection measures of which we in this country can be very proud.

6.13 p.m.

The Under-Secretary of State for Prices and Consumer Protection (Mr. Robert Maclennan)

This has been a most interesting and valuable debate in which a great many detailed questions have been asked. It will not be expected of me to reply to all of them now—indeed, the hon. Member for Southend, West (Mr. Channon) said that he would be happy to have some of the points he raised considered so that we could be armed to deal with them properly in Committee—but I shall do my best to reply as fully as I can to some of the points which have been made.

Inevitably, in a complex measure of this sort, which is, substantially, before the House of Commons for the second time, a number of hon. Members have developed considerable expertise in the matter. As I did not have the benefit of taking in some of the earlier discussions I recognise my own limitations.

I think that the debate has demonstrated that there is a general desire to get the Bill on to the statute book as soon as possible, so that the necessary work to make it effective can begin as soon as possible. Therefore, I am heartened by the general welcome which the Bill has had on its arrival from another place, where it was amended. I think that it is generally agreed that it is in an improved form. I trust that this augurs well for its speedy passage through its remaining stages.

A number of hon. Members have emphasised that the Bill is of great importance in extending the protection of the consumer in all types of credit transaction. At the same time, we should not lose sight of the fact that the Bill will confer great benefits on sections of the credit industry by freeing it from outmoded restrictions such as those contained in the Moneylenders and Pawnbrokers Acts.

However, at this stage it is inevitable that the attention of those concerned in the industry should tend to be concentrated on the restrictions which will follow from putting all consumer lending on substantially the same statutory basis. These restrictions will mean that many consumer credit businesses will have to make wide-ranging alterations in their procedures. In some cases, some people may say, "Not before time", but in the vast majority of cases I believe that the need to alter old methods of doing things will not be so immediately apparent. This is part of the price to be paid for ensuring that the consumer always gets a square deal and can make ready comparisons between one source of credit and another.

Where it is shown that these changes will impose an unreasonably onerous burden on creditors, to the ultimate disadvantage of consumers, we, like the Conservative Government who introduced the original Bill, are ready, as my hon. Friend has said, to see what can be done to amend it. We have already, I think, demonstrated this in the extensive consultations that took place before the Bill was introduced and continued during the passage of the Bill in another place.

But we are ready to make amendments only where this can be done without weakening the protection afforded by the Bill to the consumer, and we are not ready to depart from the general principle that any exemptions under the Bill must be made on the basis of the type of credit business being engaged in, and must not be made on an institutional basis.

I come now to one or two specific points raised in the debate. The hon. Member for Southend, West, speaking of the provisions of Clause 2(2), asked what was the justification of the provision empowering the Secretary of State to issue specific instructions to the Director General. No doubt the subject will be returned to in Committee. I shall simply say now that these directions can cover such matters as the form of his accounts and other aspects of his administrative functions. The power does not, however, apply to his licensing decisions, because the direction-making power does not apply to determinations against which there is an appeal to the Secretary of State.

The hon. Gentleman also asked about the appointment of staff and how quickly we were seeking to set up the procedures under the Bill. It is our hope that two top posts will be advertised within the next few weeks, and other staff will be appointed by the Civil Service Department as civil servants in the way usual for civil servants. On the question of organisation, I cannot fully comply with the hon. Gentleman's request that we should set out a table of structure, but the organisation of the Office of Fair Trading provides that, under the Director General, there will be a new consumer credit division headed by a director.

The hon. Gentleman also asked about the timing of various parts of the Bill. Here again, we hope to proceed as quickly as possible. Subject to consultations, it is our hope that the advertising provisions will be in force within a few months of the Royal Assent. We hope, too, that the content and supply provisions set out in Part V will be in force within a year.

We have it in mind that that part of the Bill relating to licensing can perhaps be in force in two years. We recognise that there may be difficulties which cannot be foreseen now and which would require consultation to iron out. It would be unwise to give firm commitments about dates now. However, we recognise the desirability of proceeding with as much speed as possible.

One question raised by a number of hon. Members today, principally by the hon. Member for Southend, West, concerned bank overdrafts and loan accounts. These remain subject to the Bill, first because the Crowther Committee's concept of exemption of such business below a minimum rate of charge of Bank Rate plus 2½ per cent. was not practicable, since the margin above Bank—or base—Rate would have had to be much higher to cover interest and other charges in the total charge for credit, which would have meant too much other lending, intended to be caught by the Bill, would then also have been exempted; and, secondly, because exemption of overdrafts provided by some lenders only, such as joint stock banks, would be against a basic principle of the Bill and would have been justifiably resented by other financial institutions that provide overdrafts.

But the provisions of the Bill have been amended to meet the objection that the documentation and other requirements in the Bill would adversely affect the flexibility of the overdraft system. Provision has been made in Clause 74 for the Director General of Fair Trading to make determinations exempting overdrafts on current accounts from the documentation provisions where he considers that this is not against the interest of debtors. This possible exemption will apply to all overdrafts, not just those granted by the joint stock banks. Provision has also been made for the Director General to make determinations under Clause 49 excluding certain current accounts from the ban on canvassing off trade premises. So now bank managers can continue to have reasonable flexibility in discussing lending facilities with their customers in semi-social surroundings.

These exemptions will apply to overdrafts for the reasons I have stated.

Loan accounts are in a different position, since they are separate accounts used for credit drawings but not used for current account daily business, although they are granted only to current account holders and are often linked to drawing on the current account. Loan accounts do not, therefore, have the same need for flexibility as do current accounts, and differ little from personal loans, to which the banks accept that the Bill should apply. Any exemption, even if limited to exclusion from the documentation provisions, would have to apply to all creditors and would leave a loophole to be exploited by the unscrupulous. Loan accounts accordingly remain fully subject to the Bill.

Mr. Channon

I am not quite sure why the hon. Gentleman says that there would be loopholes open to the unscruplous. If he were to make the same restriction under Clause 74 for loan accounts as for overdrafts the Director General would have ample powers to make sure that that did not occur.

Mr. Maclennan

I would prefer to return to that point in Committee, because it is complex. I know that there is considerable interest in it. I feel certain that we shall have to come back to it.

It has been argued that the terms governing loan accounts—I think it was the hon. Member for Hertfordshire, South-West (Mr. Dodsworth) who made this point—interest calculated on a daily basis on the amount outstanding and payable at least quarterly in arrears, and with the debtor having the right to reduce the loan without notice, make loan accounts more akin to overdrafts than personal loans. But such terms might be granted by any of the large number of lenders holding current accounts in addition to the clearing banks if loan accounts were exempted from the Bill.

Loan accounts differ fundamentally from overdrafts in that they are offered on a separate account as a result of negotiation and cannot be created inadvertently. There is, therefore, time for the debtor to be told in writing of the full terms of his agreement. Exemption from this protection would be likely to lead to a major switch from personal loans to loan accounts. Exemption of the clearing banks alone would be against the fundamental principle of the Bill of no exemptions on an institutional basis and would give the clearing banks a competitive advantage over other lenders.

A number of questions were raised concerning leasing, principally by the hon. Member for Hertfordshire, South-West, from his personal knowledge. The Bill provides for the regulation of hire agreements under which the hirer is an individual and the payments by the hirer are capable of not exceeding £5,000. It has been argued that commercial leasing, where the lessee is in business and has a free choice of goods because the arrangements for financing are separate from the supply of goods, should be excluded from the Bill. But we consider that the small businessman is often in as great a need of protection as the private individual. The fact that he can choose goods from a number of suppliers would be a protection against one form of pressure, but would not provide protection under the financial agreement. We consider that the small businessman should have such protection.

It was further argued that in the case of leasing the upper limit of £5,000 should apply to the capital price of the goods concerned rather than to the payments made under the agreement. But this would introduce an added complication into the Bill. The criterion for exclusion would no longer depend simply on the amount of credit provided. In order to determine whether a leasing agreement came within the scope of the Bill it would be necessary to decide whether it was a genuine leasing agreement or merely a rental agreement. That is, it would be necessary to decide whether the goods were freely selected by the lessee and whether the lessor was an associate of the supplier as well as whether the capital price of the goods themselves exceeded £5,000. In most cases anyway there is likely to be comparatively little difference between hiring agreements for goods worth £5,000 and hiring agreements where the payments total £5,000.

We do not consider, therefore, that a good case for exclusion has been made out. Hiring agreements are normally the subject of a written agreement and we see no reason why such an agreement should not, in general, conform to the requirements of the Bill. The only area in which we recognise that serious difficulties might arise is under Clause 102, which gives the hirer the right to terminate an agreement after 18 months. Provision has therefore been made for commercial leases, where the hirer has a free choice of goods, to be excluded from the clause, together with large rental agreements. Subsection (7) makes these specific exemptions.

Beyond this there are a great many technical points which affect various forms of consumer lending and about which the Department has been having continued discussions with the interests directly concerned. Many amendments have been made to take account of the points made to the Department and we have further amendments of this type under consideration.

For instance, an amendment was made in another place to Clause 83 so as not to interfere with the duty that the existing law imposes on people who draw cheques to take reasonable care in doing so. It has since become clear that some documents that look like cheques are technically not cheques and we are considering a further amendment to deal with this.

Another point is the operation of the requirement under Clause 78(4)(b) for the creditor to provide periodic statements to running-account customers. Representations have been made to the Department that the present requirement to provide such statements within one month of the ending of those periods during which there is any movement in the account would in certain cases impose unreasonable administrative and financial burdens. We are therefore considering whether some flexibility might be introduced into this provision.

Obviously, I can give no undertaking on these points at this stage, but I can say that the Department will continue to give close attention to genuine points of difficulty that are drawn to its attention. We shall be ready to see what can be done to accommodate them, provided always that the degree of protection for the consumer is not thereby reduced, and that the difficulty put forward is not put forward purely for blocking purposes.

We recognise that flexibility in the application of the provisions in the Bill will continue to be our guiding principle.

The hon. and learned Member for Runcorn (Mr. Carlisle) raised a number of matters in respect of credit reference agencies. I should like to say a little about them, although here again it may not be possible fully to satisfy the hon. and learned Gentleman at this stage that we have fully taken account of the difficulties that he raises.

We are aware that certain credit reference agencies, dealing mainly with inquiries relating to credit for trade rather than domestic purposes, are anxious about Clause 160 which gives effect to the recommendation of the Younger Committee on Privacy that the individual should have a legally enforceable right of access to the information held about him by a credit rating agency.

The clause requires an agency, upon receipt of the payment of 25p, to give the consumer a copy of its file on him. The file means all the information about him kept by the agency. This requirement entails the disclosure of the agency's sources of information, if it keeps this information on file, as well as the reports which it provides in response to inquiries from potential creditors.

These agencies would like the Bill to be amended so as to allow them to keep their sources confidential. I think that the hon. and learned Gentleman correctly stated their reasons. We accept that there may be a problem here, but we have to balance against the interests of these agencies the need to ensure that their arrangements accord with the principles of the Bill. One of these, stemming from a recommendation of the Crowther Committee. is that the protection afforded by the Bill should apply equally to all credit businesses and to all consumers. Another following a Crowther Committee recommendation is that consumers include sole traders and partnerships who may often need as much protection as private individuals. We consider that it would be wrong to seek to define the terms "consumer" and "individual", which here have the same meaning, more restrictively in relation to Clause 160.

Other suggestions have been made, such as that business agencies should be permitted to supply consumers with copies of agency reports on them without disclosing their sources of information. Although we have no wish to be unreasonable or uncompromising about this, we have serious doubts about the possible consequences of a limitation of this kind. Where an agency report contains a comment which is critical of the subject of inquiry, it may be vital to getting any error rectified for the subject to know who made the comment and in what context. Our view is that although we remain willing to consider any solution suggested to us we cannot see our way to amending the Bill in a way that would not detract appreciably from the protection that it gives to the individual. We shall undoubtedly return to this matter in Committee.

Mr. Carlisle

Will the hon. Gentleman look at what has been done in Canada, in view of the fact that the Canadian legislation makes this distinction, and find out why it has been thought wise to do it there and whether it would be worth considering doing it here?

Mr. Maclennan

I can give the hon. and learned Gentleman the complete assurance that we shall look carefully at what he said, especially about Canadian experience, with a view to seeing whether it would be appropriate in our circumstances.

From what has been said today, I fear that it is clear that a considerable amount of work remains to be done in Committee, notwithstanding the labours in another place and in an earlier Parliament. But what should make our task easier is that this House has welcomed the Bill. I think that it has enjoyed the support of right hon. and hon. Gentlemen on both sides. I feel confident that we can rely upon hon. Members to assist us in ensuring that the work of so many people reaches fruition and that the Bill reaches the statute book to become an enduring landmark both in consumer protection and in the law of credit.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).