'(1) In section 101 of the 1974 Act (right of hirer to terminate regulated consumer hire agreement) after subsection (8) insert—

"(8A) If it appears to the OFT that it would be in the interests of hirers to do so, it may by general notice direct that, subject to such conditions (if any) as it may specify, this section shall not apply to a consumer hire agreement if the agreement falls within a specified description; and this Act shall have effect accordingly."

(2) In subsection (8) of that section for the words from "this section" onwards substitute ", subject to such conditions (if any) as it may specify, this section shall not apply to consumer hire agreements made by the applicant; and this Act shall have effect accordingly".'.—[Mr. Sutcliffe.]

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

Under section 101 of the Consumer Credit Act 1974, regulated consumer hire agreements are cancellable after 18 months. Section 101(8) allows for the Office of Fair Trading to direct that regulated hire agreements from an individual applicant can be non-cancellable for a period of longer than 18 months, where it is in the hirer's interest. This amendment enables the OFT to direct that a whole class of hire agreements can be non-cancellable for a period of longer than 18 months, although the agreement must meet specified criteria.

This new power is necessary as the OFT has been receiving large numbers of very similar applications for directions. The need for individual directions can lead to significant delay with few benefits to those concerned. A particular example is that of the home computing initiative, which encourages employers to set up schemes to provide access to home computers for their employees. However, to make this economical for employers, hire agreements must be non-cancellable for more than 18 months. The increasing popularity of the scheme means that the OFT is receiving a high number of individual applications, which is resulting in significant delays for applicants. This is a barrier to the success of the home computing initiative.

Would my hon. Friend, in respect of this new clause and many others in the Bill, express his view on the timing of the legislation and its progress in the other place? Is it not important that the Bill gets to the other place quickly and that the other place takes it seriously, given that so many constituency interests are involved for Members in all parts of the House, particularly on those provisions relating to retrospectivity in respect of the loan shark parts of the Bill? Will he take the opportunity, when it is in order, to make the appropriate comment, because many of us are very concerned about this matter?

Order. I think those are points for Third Reading.

I am grateful to my hon. Friend Mr. Allen for making those points and I am sure that I shall return to them at the appropriate time when it is in order.

To return to the point about the home computing initiative, which is a key plank of the Government's policy of increasing access to the internet in UK homes, this amendment would enable the OFT to grant group directions in this and other cases where it would be in the interests of hirers to do so. It is not necessary for the OFT to approve each application individually to provide adequate protection for hirers—that wastes time and resources; it can simply identify general criteria, which will ensure that agreements under the scheme are in the hirer's interest. The new clause will cause no reduction in consumer protection, but there is a real benefit associated with the costs and efficiency of the process.

I want to deal with the new clause only briefly and in general terms. We made the point on Second Reading and, indeed, I made it at considerable length in Committee—I think that the Minister anticipates what I shall say—that we are really concerned about increasing the power of the OFT. I should be ruled out of order if I repeated the arguments that I put forward on Second Reading and particularly those that I gave in Committee, but the extra powers that the OFT will get from the Bill are a matter of concern to a great many people—in the industry and generally—and to hon. Members.

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I see my hon. Friends queuing up; I shall give way to my hon. Friend Mr. Hawkins.

My hon. Friend is making an extremely important point. As he and the Minister are aware, I used to work as a corporate lawyer before I came to the House in 1992, and I spent part of my career in the consumer credit industry. Does my hon. Friend agree that one of the success stories of Britain in the latter part of the 20th century and the beginning of the 21st century has been the creation of a flexible and successful consumer credit industry? We do not want cowboys to be involved in it, but equally we want to make sure that we do not give power to over-mighty regulators. Does my hon. Friend agree that reputable organisations in the industry, such as the Finance and Leasing Association, have expressed concerns about giving too many unfettered powers to the OFT?

My hon. Friend is right. We have a very flexible and successful industry. I was going to say that we support the principles of the Bill, but that we are concerned about aspects of it—which we explored in Committee and can explore this afternoon. My hon. Friend has put his finger on one of those.

The OFT is already a powerful organisation. It was not created by the Consumer Credit Act 1974, but it has been given an awful lot of powers. I bored hon. Members at length in Committee and on Second Reading—

No, no.

The Minister says that I did not.

I discussed at great length in Committee my problems with another matter in which I have a constituency interest—the horse racing industry. As we approach the great week at Cheltenham, it is probably appropriate to remind the House that the way in which the OFT was looking at the horse racing industry was very clumsy.

Order. I ask hon. Members to confine their remarks to the new clause that is being debated.

I apologise, Madam Deputy Speaker.

I was going to say that the OFT threatened to wreck the industry with a heavy-handed approach and to make the point that there was little that the House could do about it. I am therefore concerned about giving the OFT more powers when we cannot affect its decisions. I shall attempt to explore that issue a little more deeply on a later amendment. However, although I shall certainly not recommend to my hon. Friends that we oppose the new clause, I want to put it on the record that we recognise the fears expressed by industry representatives that the OFT is becoming far too powerful. I regret that.

My hon. Friend has made his point clearly, as did my hon. Friend Mr. Hawkins. Does he agree that the OFT has a valuable role in protecting the consumer and that Conservative Members would certainly not want to see large—or, come to that, small—organisations working together as cartels, monopolies or oligopolies?

Order. Once again, we are going rather wide of the new clause. I ask hon. Members please to confine their remarks to the new clause.

Does my hon. Friend agree that although we agree to the new clause and the Minister's interesting points, we do so not only with concern about the power of the OFT and our inability in the House to control all its actions, but with a view to our need to protect the consumer as well?

My hon. Friend is right, and the objective of legislation of this kind is balance. That involves being fair to consumers—consumer protection is of paramount importance—but not throwing the baby out with the bath water by being too prescriptive. We shall come to that issue in a few minutes, I suspect, on other amendments. I am concerned about the extra powers being given to the OFT, especially when the House cannot affect what it does. When constituents complain to us about matters that we cannot raise with the people who make the decisions, that is regrettable.

I want to say briefly that I am happy to accept the Government's new clause. Although I have expressed reservations about the OFT, the new clause will give it the power to do the job that it does not do often enough: to adjudicate on whether or not trade is fair. My concern is that the OFT does not do enough to promote fair trade and that it regards itself more as a competition agency.

The promotion of fair trade is a proper role. Indeed, I have tabled other new clauses and amendments that would impose further responsibilities on the OFT. However, in deference to the Conservative spokesman—I share some reservations with Mr. Robertson—my view is that it is not the accretion of power to the OFT, but the imbalance in the way that the OFT applies its powers and its accountability that are matters for concern. For that reason, the thrust of the new clause is to make the OFT do more of what it should do and perhaps to spend less time on what it should not do.

Mr. Robertson was consistent during the debates in Committee in his views about the OFT.

And about Cheltenham.

And about the timing of Cheltenham week, as my hon. Friend suggests.

I want to reassure the House that the new clause does not involve a serious giving up of power that will thwart consumer protection in any way. The idea of a class agreement will help the consumer. That is the basis for moving the new clause. For example, about 300 applications have been made for individual exemptions—which can take up to eight weeks, to the detriment of the consumer. There are other examples of class agreements, and the process could be applied to the bicycle-to-work campaign. Notwithstanding—I am sure that this will be a consistent theme this afternoon—the OFT's role, this important step will be beneficial to the consumer. The reason why we did not take it earlier is that we were looking around to ensure that anything that helps the consumer would be included in the Bill. The new clause is entirely sensible.

Question put and agreed to.

Clause read a Second time, and added to the Bill.