Consumer Credit Bill

My Lords, I apologise to the Front Benches as I was unfortunately detained coming into London before their opening addresses. I offer my warmest congratulations to the noble Lord, Lord Mawhinney, whose hinterland I know extends to Association Football. I look forward to the maiden speech of my noble and learned friend Lady Clark of Calton; I know it will be brilliant in exposition and delivery. I also apologise on behalf of my noble friend Lady Thomas of Walliswood, who is the chairman of Sub-Committee G of the European Union Committee. She is unfortunately indisposed today, but had hoped to speak in this debate and was anxious for your Lordships to know that Sub-Committee G has itself completed an interim report, published on 27 July this year, on the proposal from the European Commission for an EU directive on the harmonisation of consumer credit. In that report we drew attention, mainly on UK evidence alone, to the rapid growth in consumer credit and the proliferation of new credit products; the steep rise in indebtedness; aggressive competition between lenders, leading sometimes to reckless lending and the mis-selling of products; heavy-handed debt recovery practices; the need for clearer consumer-friendly information about lending terms and conditions; and the need for better protection for disadvantaged consumers. That inquiry has now been suspended, but we have had notice that the Commission is now bringing forward a revised directive, and we will continue with our inquiry as a result. As I said, the Commission has modified its position, but as yet we do not know whether the threat that the Commission may want to introduce EU-wide harmonisation of consumer credit has receded. But I say to my noble friend that, whatever the response of government, we hope that the EU directive does not weaken the scope and effectiveness of UK domestic consumer credit legislation, that it still offers the protection currently enjoyed by British consumers, and that it will not constrain the capacity of future governments to respond rapidly and flexibly to developments in the domestic consumer credit market which might not necessarily be replicated elsewhere in the EU. In concluding, I ask my noble friend whether the Government have had any first thoughts on the revised EU proposal for the consumer credit directive and whether current UK legislation might offer a model to the European Union upon which it can progress further thinking.