Consumer Credit Bill

I am perfectly happy to take all the amendments in the group together, so I shall speak to Amendments Nos. 13, 15 and 16. They are probing amendments that aim to create a more flexible and clearer approach to sanctions for non-compliance with Clause 6. I shall deal with the simplest amendment first, which is Amendment No. 13. I need add nothing to the words of the amendment; it permits the requirement to provide annual statements to be satisfied if the lender and borrower agree that information about the agreement can be accessed electronically by the borrower. That is straightforward, and the Government will say either yes or no; they do not require any further argument from me. So far as the other amendments are concerned, perhaps it is necessary for me to explain a little about the effect of Clause 6, which will require creditors in regulated fixed-sum credit agreements to provide debtors with annual statements in the specified form. If the creditor does not give the debtor an annual statement when required to do so, the creditor is not entitled to enforce the agreement during his non-compliance, and the debtor is not liable to pay a ““sum of interest”” during that period. The concern that I express relates to new Section 77A(6)(b), which will deal with the issue of interest and states that,"““the debtor shall have no liability to pay any sum of interest to the extent calculated by reference to the period of non-compliance or to any part of it””." Despite many years as a lawyer, I cannot explain clearly what that means; I defy the many lawyers who entertain us so often in your Lordships’ House to do so. Nor is it clear how the provision would affect different types of credit, particularly where the credit is structured in such a way, as is sometimes the case, that interest is not spread evenly over the period of the loan. Without wishing to push the point too far, the clause could create the possibility of market distortions and could affect different credit products differently. All noble Lords will agree that this issue is complex. There is an irony in this amendment, and in further amendments that we and the Conservatives have tabled. We have bored the House for several years on the question of why the Government insist on doing things by regulation rather than by putting them on the face of the Bill, but there are many areas in the Bill where we think that it would be preferable for the Government to take power to deal with these issues by regulation rather than putting them on the face of the Bill, particularly where the clause is opaque at best. I beg to move.