Consumer Credit Bill

I am pleased to have the chance briefly to contribute to the debate. I congratulate my hon. Friend the Member for Tunbridge Wells (Greg Clark) on his excellent maiden speech. He has already made a distinguished contribution to the Conservative party as director of policy—some might say that a little more work remains to be done given the evidence of the past few weeks—and I read many of the research department’s products when he was in charge. I am sure that we will hear more from him. I also congratulate my hon. Friend the Member for Basingstoke (Mrs. Miller) on her maiden speech. Not only were we at university together, to which she alluded, but I shared a flat with her husband, and her daughter, Georgia Charlotte Mary Miller, is my goddaughter. I am biased in her favour and congratulate her on having arrived here. She may be charming, but she has inner steel and determination—she has not only run a successful and happy family with three children over the past 15 to 20 years, but had an outstanding business career. I am sure that she will make a wonderful contribution to this House. I have listened to the debate with interest and particularly enjoyed the contribution by the right hon. Member for Leeds, West (John Battle)—I hope that the Minister was listening carefully, and I think that he was. If we want to restore people’s faith in the House of Commons, we could do no more than play the tape of the right hon. Gentleman’s speech, which was passionate, highly informed and persuasive. I hope that the Minister will listen carefully to the right hon. Gentleman in Committee. I want to deal with a couple of issues that have already been alluded to, the first of which is the question whether the definition of ““unfairness”” should be tighter. On the face of it, I agree with the Minister that the definition should not be too precise. Clause 19, which deals with unfair relationships between creditors and debtors, appears to give the court everything that it could possibly want:"““The court may make an order . . . if it determines that the relationship between the creditor and the debtor arising out of the agreement . . . is unfair to the debtor because of . . . any of the terms of the agreement or of any related agreement; the way in which the creditor has exercised or enforced any of his rights under the agreement or any related agreement””" or, and one could not ask for a greater carte blanche than this,"““any other thing done (or not done) by, or on behalf of, the creditor (either before or after the making of the agreement or any related agreement).””" At least on the face of it, that would seem to provide the court with everything that it needs, but my concern, to echo the right hon. Member for Leeds, West, is about cases that do not arrive in court. We are not talking about equal parties here. That also relates to the point about retrospection. Generally speaking, as I think my hon. Friend the Member for Wealden (Charles Hendry) would agree, we would be hesitant about retrospective legislation because one of the key principles of the law is not only equality before the law, but certainty. One might think that a clause that states that"““A determination may be made under this section in relation to a relationship notwithstanding that the relationship may have ended””" would be deeply damaging to any sense of certainty between two parties entering into an agreement. Instinctively, I would be much less worried about retrospective legislation in this context than in some others, because it does not deal with parties who are equal in any way whatsoever, but with people who are often at the very bottom end of the income scale—people who live in grinding poverty with the greatest difficulty in getting by, as we have heard, not just from week to week but from day to day, and who live in fear with debt collectors already knocking on their doors. That must be recognised in the Bill so that the courts will understand that Parliament enacted it in order to stand up for the little people, not the big people. My experience as a constituency MP suggests to me that the problem exists not only at the bottom end of the scale but in the middle, where respectable, or so-called respectable, financial institutions deal with people who have modest incomes but some savings. In such cases, the scales are weighted too much in favour of the financial institution. I have often dealt with the financial services ombudsman—I am sure that other Members have had similar experiences—and sometimes think, ““Whose side are you on?”” The idea is supposedly to help the little person, not the big institution. I was involved in a case involving Abbey National that has still not been resolved satisfactorily. On 4 April, I had an Adjournment debate in this House on a case of cheque fraud on which the Financial Services Authority has failed to act in the 18 months since the loophole was exposed. Anybody could still do today what was done to many constituents of mine who lost hundreds of thousands of pounds. The regulatory environment is often far from fair in paying sufficient heed to the needs of consumers. Of course we want equality and certainty before the law, but we also want justice. There has been a general recognition, in successive Governments’ approach to regulation, that wholesale credit markets or wholesale credit derivative markets, for example, require a very light touch because one is dealing with adult parties to a transaction who do not want or expect the Government to interfere very much. At the other end, there is a much greater degree of interference; that is why I was attracted to the suggestion of a reserve power. I should like there to be powers that are potentially draconian but exercised with the discretion and judgment of Solomon, although I know that is not always an easy balance to strike. More needs to be done for the consumer and for the little person, not for the big institutions, which already have too many other cards stacked in their favour.