HC Deb 21 January 2004 vol 416 cc1281-2W
Mrs. Curtis-Thomas

To ask the Secretary of State for Trade and Industry if she will make a statement on her Department's work with the Office of Fair Trading on consumer credit law reform. [148899]

Mr. Sutcliffe

The Department published its proposals for reform of the consumer credit regime in the recent Consumer Credit White Paper; "Fair, Clear and Competitive—The Consumer Credit Market in the 21st Century".

The White Paper is the culmination of a major review of consumer credit law that was launched in July 2001. Our proposals have been drawn up through close consultation with all of the key stakeholders representing industry, consumer groups and enforcement agencies—including the Office of Fair Trading. We are continuing to work closely with the Office of Fair Trading on developing the detailed legislation and guidance needed to implement our proposals.

Mrs. Curtis-Thomas

To ask the Secretary of State for Trade and Industry how the Office of Fair Trading intends to improve the fitness checking of consumer credit licence applicants through access to criminal records. [148900]

Mr. Sutcliffe

New procedures for checking criminal records are due to be introduced by the OFT this year. The OFT is currently finalising arrangements for the introduction of these new measures which will be announced in Spring 2004.

Mr. Gardiner

To ask the Secretary of State for Trade and Industry (1) what assessment she has made of the feasibility of capping annual percentage rates on credit cards but not on short-term loans; [149503]

(2) when she expects the research which her Department have commissioned into the way interest ceilings work in other EU countries will be completed. [149504]

Mr. Sutcliffe

The Government are not persuaded of the benefits of introducing interest rate ceilings for credit products of any type. A rate ceiling could actually encourage rates to gravitate towards the ceiling, causing detriment to consumers and competition. It might also encourage lenders to make the cost of credit more expensive to consumers in other ways (for example by introducing higher charges), or lead some lenders to exit the market, denying some consumers access to credit.

However, the Government have commissioned research into the way these interest ceilings operate in other countries. It is anticipated the research will be published in the spring of this year.