Financial Services Bill

I suppose the Minister is right in one respect. This long group of amendments under the catch-all heading ““Consumer protection”” raises many issues about which our constituents care deeply. It is just a shame that the Minister is resisting and rebutting almost all of them, except the Government amendments. But I do not want to sound too churlish. He has conceded—we have managed to extract—one minor concession from the Government in Government amendment 3. I therefore feel that all those hours and weeks in Committee were productively spent, and for that small measure I am grateful to the hon. Gentleman. Time is short so I will comment on the series of amendments tabled by the Minister, and then on those in my name and that of my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson). Government new clause 4 sets out a series of order-making powers for the Treasury in respect of the transfer of regulation of consumer credit matters from the Office of Fair Trading to the Financial Conduct Authority. I am grateful for the clarification of the Government's intentions. My comments on this and the consequential amendments in the group relate to the time scale for these arrangements. The new clause sets out the paving changes rather than the regulations, saying that the Treasury may well make these orders in due course. It gives a sense of the architecture of those and the fact that most of the powers available to the OFT under the Financial Services and Markets Act 2000 will be available to the FCA and so on, but we do not yet have the time scale for those orders to be made and to take effect. Many loose ends remain, even after the amendments. How will the local weights and measures authorities dovetail with the new arrangements, the FCA and so forth? What is holding the Government up in making those changes, publishing the new arrangements and making it clear to those who may be slightly concerned that the transition period could create a sense of limbo in which a number of issues fall between the gaps? We do not want consumer credit arrangements to be put on the back burner during the transfer—quite the opposite. We need this time more than ever to help consumers who are under strain on various fronts, as is pointed out in the amendments tabled by my hon. Friend the Member for North Ayrshire and Arran (Katy Clark), the hon. Member for Eastbourne (Stephen Lloyd) and others. New clause 9 in my name seeks, as the Minister mentioned, to require the Financial Conduct Authority to produce recommendations within a year of the commencement of the Act to phase out the practice of directly charging consumers fees or charges for the provision of debt management plans. For the sake of clarity, I should declare an old interest in this. For five years I was a trustee of the Consumer Credit Counselling Service, a not-for-profit provider of creditor charging debt management plans. It got lenders to pay for the process of helping to consolidate some of the debts of the most heavily indebted individuals in society, not charging them for the process but asking the banks and the lenders to chip in with a share of any proceeds that were recovered in order to pay for that process. That is the virtuous process that we should be looking for in the debt management plan industry. Unfortunately, there are a number of private for-profit providers who, instead of taking the charge for the administration of that consolidation process from the lender, go to the customer, the consumer, some of whom may be in fear for their houses and well-being because they have become so heavily indebted for whatever reason. Those are companies that I believe are preying on the desperation of customers who are heavily indebted. Worse, the charges on the consumers can often be made up front, so those customers who make payments to a debt management consolidator that is renegotiating their loans and credit often find that those payments can first go to pay the company's charges before even a penny goes towards paying down some of the individuals' debts. There have been numerous stories over a number of years of many consumers who, while thinking that they are doing the right thing by consolidating their debt and getting the situation sorted out, find many months later that all they have done is feed the profits of those companies who were taking advantage at that time. That is why the Opposition say that enough if enough. The time has come to bring forward proposals to phase out the practice of fee-charging for the provision of debt management plans to customers. We have framed the new clause in such a way that it is in no way unreasonable. We have not insisted on a particular way in which this is done or a particular date. We have asked the FCA simply to bring forward recommendations about how this could be facilitated.