This amendment relates to the substantive amendment incorporated in the Bill on Committee Stage as section 3. A number of different points were raised. I am assured that the amendment Deputies argued for will be circulated.
Consumer Credit Bill, 1994: Report Stage (Resumed).
Debate resumed on amendment No. 20:
In page 14, to delete lines 26 to 28.
—(Minister of State at the Department of Enterprise and Employment).
We received it.
I explained to Deputy Molloy why we were not persisting here. It was proposed to delete the section from its present position in the Bill and incorporate it more appropriately under the miscellaneous provisions. We will deal with the amendment regarding marital status at the appropriate time.
Deputy O'Keeffe said we have enshrined in the Bill provisions to outlaw discrimination but asked how we can be sure it will achieve its purpose. Each case must be made on its merits. It will now be an offence to discriminate on any of these grounds, including marital status, colour, creed, social status, location or whatever. I refer Deputy O'Keeffe to section 5 (d) which gives the director power to institute proceedings in the High Court for an order requiring any person engaged in practices contrary to the obligations imposed on him by the Bill to refrain from such practices. I would have thought that is a fairly compelling sanction. We are talking about the lender refusing credit to someone on one of these grounds. The simplest sanction is that the Director could discontinue a lender's licence.
The lender would not say that was why he refused.
No, he would not but that matter would have to be established in court. It is like discrimination in employment. Just because a woman is not promoted does not de facto amount to a case for discrimination. However, the reason she was not promoted and a male colleague was may establish the fact that she was discriminated against because she was a woman. Section 5 (e) is also relevant since it gives the Director power to investigate complaints concerning possible breaches of the provisions of the Bill and in deciding whether to conduct such an investigation the Director may have regard to other dispute settling procedures.
Deputy McDowell raised a related point on Committee Stage. He argued that it could conceivably be dangerous in certain parts of the city for those collecting payments on behalf of moneylenders to carry out their duties. I do not think anyone is challenging the provision in the Bill which makes it an offence to discriminate on grounds of belief, race, colour or location. As regards the argument made about drugs, I agree it could be a factor in terms of safety and so on as it is a common phenomenon in many cities and towns. Collecting local authority rents can be a hazardous occupation. However, it would be a very dangerous precedent to legislate for no-go areas.
The Bill does not oblige the lender to make credit available. However, if he refuses it on the basis of any of the considerations here it could be an offence. If that can be established on the merits of the case then the lender would suffer the consequences.
Amendment agreed to.
Amendments Nos. 23 and 23b form a composite proposal. Amendment No. 22 is consequential on amendment No. 23 and amendment No. 20a is consequential on amendment No. 23b. It is suggested that amendments Nos. 20a, 22, 23 and 23b be taken together.
I move amendment No. 20a:
In page 14, line 29, to delete "subsection (2)" and substitute "subsections (2) and (3)".
This relates to local authority loans.
It does not.
It relates to deleting subsection (2) and replacing it with subsections (2) and (3). Subsection (3) is the new amendment and it governs it.
It is setting the way.
Yes. Section 4 (2) (a) (iii) states that the Bill shall not apply to various categories outlined in the section including a society registered under the Provident Societies Acts and a registered society under the Friendly Societies Acts and a local authority. The main thrust of this amendment is to excise that reference to local authorities and to bring them within the scope of the Bill.
The substantive amendment would require the following insertion:
The provisions of this Act may only be applied to housing loans advanced by local authorities, within the meaning of the Local Government Act, 1941, by regulations made by the Minister after consultation with the Minister for the Environment, and different provisions may be applied at different times to different classes of loans, by reference to such matters as the Minister considers appropriate. A loan, not secured by mortgage, made by a local authority for the purposes of carrying out improvement works (within the meaning of section 1 of the Housing (Miscellaneous Provisions) Act, 1979), to a house shall be regarded as a housing loan (within the meaning of this Act) for the purposes of this Act.
I am pleased to tell the House that I now propose to bring local authority housing loans within the scope of the Bill. I have consistently held the opinion — and argued in Opposition — that this legislation presents an ideal opportunity for introducing a uniform and consistent system for the regulation of all housing loans, irrespective of the character of the lender. I could not see then and cannot see now, and I suspect Deputy O'Rourke would be sympathetic to this point of view, why we should make a distinction between a local authority and a building society, a local authority and banker or whatever. Until now the view on this matter regarding certain requirements of the Bill relating to the disclosure of commissions, fees and endowment mortgages was that that prohibition on the linking of services were not relevant to local authority lending. Also, it was intended that my colleague, the Minister for the Environment, as a result of Deputy O'Rourke's efforts, would make certain provisions——
He sent us a letter.
——appropriate to local authorities, for example, the disclosure of total cost of credit and the number and amount of instalments that would apply to such loans. However, I argued then and argue now that a major adverse implication of the exclusion of such loans from the scope of the Bill would be that the Director of Consumer Affairs would not have any role in ensuring that local authorities comply with the requirements of the Bill. Moreover, aggrieved local authority borrowers would have to seek redress from the Ombudsman. Such fragmentation is contrary to the unified approach to consumer credit underlying the legislation and would place those who rely on local authority finance in a disadvantaged position vis-à-vis other borrowers in that they would be denied recourse to the Director of Consumer Affairs and his office.
Harping back to the earlier discussion about the diversity of proposals available to house purchasers resorting to their local authority, it is more important than ever that local authorities should be required to explain to would-be purchasers, in the simplest most intelligible form, the implications of the various packages available. The shared ownership to which Deputy O'Rourke referred is a complex instrument.
I do not like it.
I am not mad about it either. I believe some consumers enter into it because they see no other prospect of getting housing and they do not understand the imposition of the remaining half of the equity that must be purchased 20 or 25 years later. I understand the Department, local authorities and so on have been working on various policies that will afford them protection in that regard, but whatever about the merits of shared ownership or any other measures involved in social housing, it is not an argument against local authorities being subject to the requirements imposed by this Bill. It is all the more important that local authorities should have the access provided under the Bill.
The effect of the amendments being tabled is that there will be greater clarity in the relationship between local authorities and members of the public with whom they deal. The consumer who deals with a local authority will now be entitled to the same protection as will apply if they were to deal with another institution. Access to the Director of Consumer Affairs will be available and consumer protection in this area is being legally underpinned.
The Minister won on this amendment but not on an earlier one. As he generously acknowledged, I had undertaken considerable work in securing recognition from the then Minister, Deputy Smith, that the provisions of the Bill would apply to local authorities and apply to their loan applications. The Minister is correct in saying that the housing loans issued by local authorities should be covered by the Bill and be under the remit of the Director of Consumer Affairs.
A good deal of my constituency work relates to housing matters including people seeking council housing and other various loans. Those of us who are extensively involved in constituency work are aware that the arrangements for the repayment of HFA loans are unsatisfactory. If the Consumer Credit Bill had been in place when the HFA was being promulgated HFA loans would not have been provided. The manner in which repayments rise is horrendous. If people become social welfare recipients their repayments are supposed to be reduced to be compatible with the rate of social welfare benefit they receive, but that takes some time to achieve and a good deal of correspondence and dealings with local authorities. At the end of an inordinate number of years such borrowers owe huge amounts of money and, having regard to how the HFA operates, they may never own their houses. I have been alarmed by cases brought to my attention and particularly alarmed by the manner in which HFA loans are sold as a panacea for all difficulties. I am aware that the Department of the Environment is seeking to devise various strategies to deal with different situations as they arise.
I have dealt with many applications for shared ownership loans and it is only now that their implications are coming to light. I understand that after 15 years, although the Minister said 25 years, borrowers, who are already paying low rents towards the local authority portion of shared ownership loans, must increase their repayments to include the additional council portion of those loans. I have yet to hear a satisfactory explanation of that loan facility. I am not directing those castigating remarks at the officials present because I support the amendment. Rather I am explaining that the complexity associated with house purchase loans to which we referred earlier extends very much into the local authority arena also, particularly in regard to the various loans on offer, which I am sure derive from the imaginative proposals put forward by Ministers and officials at the time. I do not believe, however, that their implications were thought through, particularly in respect of the HFA because it was established at a time of high inflation and spiralling increases and was ill-conceived. Amendment No. 23b states:
A loan, not secured by mortgage, made by a local authority for the purposes of carrying out improvement works (within the meaning of section 1 of the Housing (Miscellaneous Provisions) Act, 1979) to a house shall be regarded as a housing loan (within the meaning of this Act) for the purposes of this Act.
They used be termed "reconstruction loans" on the application form, within which category can be included many improvement works such as central heating, additions, kitchens, bathrooms and so on. It was an effort on the part of local authorities to cater for people who would otherwise be unable to obtain the money. From my dealings with constituents it was my understanding that such a loan could be added to one's SDA or other local authority loan, forming a composite loan. Reconstruction or home improvement loans are regarded as housing loans but their amount and tenure are more limited than in the case of SDA loans. To the best of my recollection a reconstruction loan is repaid over 15 years whereas an SDA one can be repaid over, say, 20, 25 or 30 years. This distinction should be explained to prospective applicants.
In my dealings with local authority officials on housing loans over the past 12 months I have found them to be much more helpful, explaining all of the terms in greater detail to applicants. Heretofore their attitude was: "Here is the application form, fill it up and your application will be processed". I am very appreciative of the approach of the Urban District Council in Mullingar which goes through every line of an application with the applicants who must now sign application forms before an official, stating they have read the terms and fully understand their meaning and implications. That practice has been built up in regard to housing loans over the past four or five years and represents a definite improvement.
I strongly support the Minister's objective in this amendment. However, I urge that there be no delay in dealing with applications for housing loans. Local authority engineers must inspect sites and draw up reports, which must be accompanied by an applicant's P60, a copy of his or her weekly wage slip and the £25 fee. Very often an applicant will have supplied his or her P60 but not the wage slip. The local authority will not send out its engineer until all the documentation has come to hand and this can result in a long delay.
There have been court cases on this matter. When an applicant applies for a local authority housing loan, an engineer is sent out to inspect the relevant property but the applicant should not then assume that to be proof that the property is structurally sound in every respect. I have come across people who were fooled into so believing. They should be aware that the engineer merely inspects the property to verify that there is the wherewithal within that structure to call down that loan in the event of default in payment. The motto is caveat emptor— one should also engage one's own engineer or consultant to inspect the house to ensure it is sound in all respects.
When replying I should like the Minister to confirm what I have said because I am aware of a pending court case. I always advise applicants to engage their own engineer to have their property thoroughly inspected so that they will have some redress in the case of faults being discovered later.
I regard those amendments as worthy of support.
It is very encouraging to note that, when Democratic Left joined this Government, a Bill that had been debated over such a long period could be substantially improved—
And designed to provoke the Deputy opposite.
I approve of it.
——and yet omit an important category of consumer. While acknowledging Deputy O'Rourke's support, I want to compliment the Minister——
And his predecessor.
——without whose involvement and enthusiasm this section would not have been included. Very often the attitude adopted to people who live in local authority houses is that they are second-class citizens who do not deserve the type of attention given to a comparable working-class family who may obtain a loan from a building society. Those ably assisted by a Housing Finance Agency or SDA loan or who have acquired their first home through the relatively new shared ownership scheme are obliged in law to repay those loans like any other citizen. A well kept secret is that, when one calculates the total cost of repaying such a loan, the poorer sections of our society — those who have recourse only to schemes administered by local authorities — pay more than others with savings or on a better footing with, say, a building society.
I welcome the Minister's new subsection which will be of enormous benefit to people with relatively low incomes, many of whom are subjected to the ordeal of first having their applications rejected by a financial institution, usually a bank or building society, which tends to regard them as financial liabilities and will not provide the requisite loan. In fairness to the State, it conceived the notion there was another band of people the financial institutions were not serving and introduced a range of schemes to assist them. The reality is that low income earners tend to pay more in repayments on borrowings than do people who can afford building society loans. We are all aware that many people are using the Department of the Environment shared ownership scheme to escape from the housing waiting lists. They have such low incomes that they are not eligible for loans from banks or building societies. Young married couples in desperate need of accommodation are attracted to the shared ownership scheme. It is very difficult to explain to a young couple anxious to be accommodated that following 20 years of paying the shared ownership repayment they will have to enter into an agreement with the local authority to purchase the house.
Nowadays people are entering their first home at the ages of 20 or 25. After 15 or 20 years they are confronted with a half mortgage. I am quite sure the 200 to 300 people who purchase from Dublin Corporation do not look further than their immediate demand to have a roof over their heads which they can afford. I see problems down the road for many of these people.
I have read the documentation that goes with the shared ownership scheme and I am worried that the vast bulk of people do not fully appreciate the financial implications of what they are entering into. It is interesting to note that if the local authority funds 50 per cent of a £30,000 house, because of the tax relief families are allowed to claim, local authorities are not allowing tenant purchasers to purchase the State's portion of the loan first. Tenant purchasers who want to buy out the State's 50 per cent are restricted from entering into an agreement. This should be modified. The end result is that there are difficulties for the consumer.
I have every confidence that the legislation debated today, in its amended form, will substantially educate the public on the financial deals they are entering into and compel local authorities and the Department of the Environment to be explicit and fair in the way they present the potential repayment of these loans. I fully support and endorse the amendment.
Far be it for me to be a party-pooper but in the process happening before my eyes the canonisation of the Minister, Deputy Rabbitte, by a cross section of Government backbenchers, situated behind him, amuses me. I accept he is making a worthwhile change to the Bill.
Is the Deputy joining the party?
Subsection (3) (a) of amendment No. 23b is not the great liberal step forward one might imagine. It does not say the provisions of this Bill will apply to SDA loans: quite the reverse. It states they will not apply to such loans unless regulations are made by the Minister, after consultation with the Minister for the Environment and that then he can apply it as he wishes, by regulations, to different classes of loans to different extents. This is by no means a self executing ordinance. It will not extend all these rights to SDA borrowers. This measure provides that the Bill does not apply to them unless and until two Ministers say it should apply to them and, then, only to the limited extent the Ministers provide in the regulations.
I am merely pointing this out to show it is like the Regulation of Information (Services Outside State for Termination of Pregnancies) Bill which was trotted out as a great liberalising measure but it consisted of a series of new crimes and restrictions. This measure now being heralded as the extension of this Bill to SDA loans is a prohibition on its extension unless a Minister or two Ministers get together, one of whom has a vested interest in obstructing the application of the loan because it will require extra expense and new procedures for his Department. Before the canonisation process goes too far there is room in this House now and then for a devil's advocate. We will need more than this to canonise the Minister, we will need a certified legislative miracle or a few first class relics before I will accept that the paeans of praise coming from behind him are justified.
I think there is a sub-terranean plot by the Minister for the Environment.
We are talking strictly about accountability. Local authorities have been even handed and fair in their assessment of clients and of people who experience difficulties. There have been very few anomalies and they have not acted mischievously in any application I have seen or in the termination of loans. Where people wished to redeem loans and move to another finance house they were always given a fair hearing and a fair settlement.
The local improvement scheme and the local authority loan are worthwhile initiatives but what good is a local authority loan of £25,000 when a local authority three bedroomed house costs in the region of £30,000 to £35,000? Who could build a new home with £25,000? When expenses are deducted the figure would be nearer to £21,000. That figure must be increased.
I urge the Minister of State who has an input at Cabinet to give local authorities permission to advance larger loans for housing for people who will not be financed by the major financial institutions. The availability of £10,000 for an SDA loan is excellent and as my colleague, Deputy O'Rourke has said, both loans can be linked for payment purposes. That has worked well.
The loan with a horrendous cost which put many people in difficulty was the Housing Finance Agency loan. That was bad value for money. Whoever thought it up did not research it very well and many people redeemed the HFA loan when we had a more favourable climate for obtaining loans during the last few years when the economy picked up and a different line was being adopted by building societies and lending agencies.
The shared mortgage scheme should be re-examined at Cabinet level. It is bad value for money. The ceiling is £50,000 and many people will not live to see the day when it is repaid. Repayments will go on forever. When their own portion is paid they will have to take up the local authority portion. Nowadays the shared mortgage option has become more popular with people and families experiencing difficulties with other agencies but when they try to redeem the loan they go from the frying pan into the fire.
Local authorities have treated their clients in a fair manner and there was no need to deal with them in a consumer credit Bill. In future a person will only be able to apply to the local authority for a loan if they have been refused by two financial institutions. They will also have to meet other criteria and if their income is in excess of a certain amount it is possible that they will not be granted a loan.
Credit unions have been a great help to people in all strata of society. This morning the Taoiseach told us that a Bill dealing with credit unions would be introduced around June and I do not want to pre-empt any of its provisions. One of the best credit unions is located in my constituency. The applicants are assessed fairly by a local committee and even though there is little emphasis on security the credit union has a 98-99 per cent success rate in securing repayments. Consideration should be given by other financial institutions and local authorities to the system operated by credit unions. The major problem with local authorities is that they place too much emphasis on security, which is not much good if one cannot pay. In many cases the cost of this security is horrendous.
Will loans advanced under the Friendly Societies Act come within the scope of the Bill? Reference has been made to the tontine society which gave rise to much difficulty. Friendly societies have expanded their activities and I am not completely satisfied that they have done this in a satisfactory manner or that they provide proper information to people.
As Deputy O'Keeffe rightly pointed out, people who apply for local authority loans must first have been refused a loan by both a bank and a building society. It is only after going through this tortuous procedure that they can apply to the local authority for a loan. Local authorities deal with the public every day on various issues and they are very good at what they do. However, people who have to apply for a local authority loan are made to feel like second-class citizens because no one else will give them the money. It is essential that these people are protected under the legislation. If we fail to do this we will reinforce the image both they and others have. It is very important that these people are treated in the same way as other borrowers.
Local authorities operate in much the same way as private lending institutions in that their rates of interest can fluctuate and they look for proof of earnings and certain securities. Local authority engineers inspect houses to ensure that the value is correct and, as Deputy O'Rourke correctly said, it is essential that borrowers also hire engineers to assess whether the house is in a proper condition.
It is important to include in the Bill a provision which protects this sizeable number of people. Purchasing a house is the single biggest purchase most people will make during their lives. If they are not protected under the Bill, who will protect them? Local authority consumers are as important as private sector consumers and it is essential that we do not reinforce the misconception that these people are not as worthy of protection as other borrowers.
I thank Deputy O'Rourke for her gracious acknowledgement that the measure will strengthen the Bill in terms of local authority consumers. It is only correct that it does this. She has been a Minister and knows that under our system it certainly helps to be at the Cabinet table. This provision will give local authorities a great impetus to operate a uniform system. Deputies have praised local authorities and many people will say that this is only to be expected as all of us were or are members of local authorities. However, it cannot be argued in the modern world that giant corporations in the private sector ought to come within the scope of this Bill while public sector organisations ought to be excluded. It is as incumbent on organisations within the public sector as it is on private sector corporations to observe good consumer standards and operate uniform regulations for dealing with the public. In future local authorities will have to have regard to the provisions in the Bill before granting loans, which has become a very complex area. There is now a diversity of housing options available to people and it is only correct that local authorities should be brought within the scope of the Bill.
Deputy O'Rourke raised a number of valid points and broadened the scope of the debate into the area of housing policy. In some ways these two issues are inextricably bound together. A number of the Deputy's concerns were echoed by other Members. This is probably not the forum where we should debate the pros and cons of the shared ownership scheme. It is a housing policy matter and more appropriate to the Minister for the Environment. I have always been somewhat uneasy about that scheme. Some consumers do not have their eyes fully open when they enter the scheme and do not appreciate that, unless they take alternative measures, there could be an albatross around their necks in 20 years' time.
Deputy O'Rourke referred to the delay in processing applications under the scheme. In most local authorities there are inexplicable delays in that regard. While many applicants are satisfied within a reasonable period, that may only prove that those people do not have alternative housing options. I understand some local authorities are contracting the legal work outside their law departments in order to deal with the backlog and the delays in the processing of the loans. I hope that will speed up matters.
Deputy McDowell cautioned against me being beatified.
That will never happen.
I sincerely hope it never will. I would never claim to have any saintly dimension and would be very upset if I were——
Purported to be a saint?
——viewed in that light. Deputy McDowell has an unfortunate disposition in life of looking at a glass and asking whether it is half full or half empty and always concluding it is half empty. If Deputy McDowell were advocating a case for the local authorities he would put precisely the opposite argument with equal facility and without any difficulty. If he is given the brief, he will argue the case.
He is good at his job.
He is very good at it. If the case were different tomorrow, he would argue the opposite. I noted what he said.
It would be folly not to involve the Department of the Environment on a matter that concerns that Department's policy. It is because there are a variety of instruments that it would be very serious if my Department enacted a measure that placed the Department of the Environment in an awkward position vis-à-vis any contemplated attack it proposes to make on housing matters. I am happy with the position, it is a major step forward.
Deputy O'Rourke, who never forgets anything, correctly reminded me that when we were dealing with this matter I raised the question of the Transport Employees Tontine and Benefit Society. She raised the matter in regard to exclusions under section 4 (2) (ii) of the Bill and asked if what happened to the tontine savers could happen again and why we are excising a provision in that regard from the Bill. The argument is similar to that pertaining to credit unions. Deputy O'Keeffe instanced credit unions as a good example of how credit can be extended at local level with a unique knowledge of local circumstances, administered by a local committee that knows the applicants and so on. I will introduce legislation on credit unions this year, it is being drafted.
Friendly societies, such as credit unions, are based on mutuality, non-profit making and ownership by the members, with loans being given only to members. They are also governed by legislation and regulation, but new legislation is being drafted. They are not included in the wider consumer area simply because of the requirements regarding membership. I refer Deputy O'Rourke to a letter of 3 April I received from the Registrar of Friendly Societies, the relevant section of which states:
The Friendly Societies Regulations of 1988 and 1992 put in place certain safeguards which were designed to address some of the weaknesses in the Friendly Societies Acts which were highlighted by the collapse of the Transport Employees Tontine and Benefit Society, which is now in liquidation. Under the Regulations, friendly societies and specially authorised societies are required to have a supervisory committee. They are also confined to investing their funds in trustee authorised investments and their accounts must be audited by a public auditor.
I am currently examining the legislation relating to friendly societies to determine whether any further amendments are required to protect the interests of members of friendly societies and I hope to be in a position to submit proposals to the Minister in this regard later this year.
The amendments to which the Registrar referred appear to be a considerable improvement on the position that obtained at the time of the Tontine tragedy when low earning workers suffered a very grevious blow because of the manner in which the Tontine society operated. Given the changes that have been introduced, not least the requirement that accounts must be audited by a public auditor, it does not appear possible that such a tragedy could recur. Since taking up office I have not been able to meet the Registrar of Friendly Societies, but I propose to do so and to talk to him about that matter and his conclusions about whether new legislation in the area of friendly societies is necessary.
The regulation route I propose is designed to ensure that the relevant provisions of the Bill are applied to local authority housing loans in a flexible manner so as to avoid undue administrative difficulties for local authorities. It is important that we do not cause problems for schemes that are particular to local authorities, such as the shared ownership and tenant purchase schemes.
The second amendment is necessary to provide that local authority unsecured house improvement loans are treated as housing loans as defined in the Bill. The amendment will ensure that the appropriate provisions of the Bill to apply to local authority mortgage housing loans will also apply to those unsecured house improvement loans. Without this amendment, inappropriate provisions of the Bill which apply to non-banking or building society lenders, such as unenforceability and power of the courts to review the interest rate, would apply to local authority unsecured house improvement loans.
This Bill has been a testament to the procedures of the House since the day it was initiated. It was subjected to very careful scrutiny on Committee Stage resulting in a better Bill, partly because of the receptiveness of the Minister to the arguments by the Opposition. This further strengthens the Bill in an important area.
Valuations are carried out on behalf of the mortgage lender to ensure that the value of the house to be mortgaged is adequate relative to the size of the loan. Borrowers are well advised to arrange for a survey to check the structural soundness of the house and, as Deputy O'Rourke concedes, the principle of caveat emptor applies. It may contribute to slowness in processing applications particularly to local authorities. Nevertheless it is a prudent measure and borrowers would be well advised to have regard to it.
Amendment agreed to.
I move amendment No. 21:
In page 14, line 30, after "agreements" to insert ", hire-purchase agreements".
Amendment agreed to.
I move amendment No. 22:
In page 14, line 38, to delete "or".
Amendment agreed to.
I move amendment No. 23:
In page 14, to delete lines 39 and 40.
Amendment agreed to.
I move amendment No. 23a:
In page 14, line 45, to delete "a credit" and to substitute "an".
Amendment agreed to.
I move amendment No. 23b:
In page 15, between lines 11 and 12, to insert the following:
"(3) (a) The provisions of this Act may only be applied to housing loans advanced
by local authorities, within the meaning of the Local Government Act, 1941, by regulations made by the Minister after consultation with the Minister for the Environment, and different provisions may be applied at different times to different classes of loans, by reference to such matters as the Minister considers appropriate.
(b) A loan, not secured by mortgage, made by a local authority for the purposes of carrying out improvement works (within the meaning of section 1 of the Housing (Miscellaneous Provisions) Act, 1979) to a house shall be regarded as a housing loan (within the meaning of this Act) for the purposes of this Act.".
Amendment agreed to.
I move amendment No. 24:
In page 15, line 39, to delete "credit agreements" and substitute "agreements to which this Act applies".
Amendment agreed to.
I move amendment No. 25:
In page 15, line 40, to delete "credit agreements" and substitute "agreements to which this Act applies".
Amendment agreed to.
I move amendment No. 26:
In page 15, lines 43 and 44, to delete "credit agreements and consumer hire agreements" and substitute "agreements to which this Act applies".
Amendment agreed to.
Bill recommitted in respect of amendment No. 27.
I move amendment No. 27:
In page 15, between lines 45 and 46, to insert the following:
"(3) The Director shall, not more than 3 months after the end of each year, present a short report to the Minister of the Director's activities in that year in relation to the performance of the Director's functions under this Act and the Minister shall cause a copy of the report to be laid before each House of the Oireachtas within 2 months of receipt of it.
(4) The Director shall furnish to the Minister such information regarding the performance of the Director's functions under this Act as the Minister may from time to time require.".
It is not clear, but I will not re-open the question, how the amendment did not qualify under the normal procedures because I thought it was raised on Committee Stage. However, it must not have been raised properly. I distinctly remember the discussion about how we would monitor the performance of the Bill.
I thought we agreed to it.
I thought so too, but let us not invite procedural problems. The question is how we measure the performance of the Office of the Director of Consumer Affairs in terms of implementing, overseeing and supervising the provisions of the Bill. On Committee Stage I emphasised the importance of the Director of Consumer Affairs reporting to the Minister and the Houses of the Oireachtas on an annual basis on the many and varied tasks which this legislation will require him to perform. The amendments proposed are designed to achieve these objectives. To avoid any delay, strict timetables are being stipulated in my amendment for the presentation of these reports to me and, after that, their being laid before the Houses of the Oireachtas. The Director's present reporting obligations under section 12 of the Consumer Information Act, 1978, will be aligned with the present provisions and form an amendment later on Report Stage.
This is designed to give the Director a mechanism whereby he can report to the Minister who in turn, can report to the House on the performance of the Bill. The Minister might require information on a particular aspect at any given time, and under subsection (4) the Director is obliged to furnish him with such information as he requires from time to time.
I am puzzled because I have a clear recollection that this was accepted on Committee Stage and the Minister is also of that opinion. This is one of the amendments to which I gave assent and why it has to be produced again now I cannot quite make out. It is right and proper that the Director of Consumer Affairs should put forward his report on how people have been affected by the Bill and gained by it. The arrangements proposed are proper. I am puzzled but, in the interests of getting the Bill through, I see no point in labouring the issue. I was in favour of it last May and I am still in favour of it.
On the question of laying a copy of the report before each House of the Oireachtas, these are fine words; it is as if someone comes in solemnly and places a report on the table and we all gaze at it. As we all know, reports are placed in the Library and one has to poke about to find them. As this Bill is so important, we should debate the reports of the Director of Consumer Affairs on the year's activity during which he will conduct a nationwide tour, organise information seminars and devise colourful explanatory leaflets. In the first year two consumer offices will be set up in Cork and, I think, Limerick.
My second point relates to education. It struck me when the Minister of State mentioned that Mr. Fagan and his officials will travel throughout the country that there is a need to make consumers aware of their rights. This is a major task. Legislation, regulations, seminars, leaflets, booklets and reports only form part of the overall picture; we need to make young people aware of their rights from the very beginning that they do not have to beg or be submissive in seeking information, that they have the right to receive information about financial institutions, and, if they do not receive it, that they have the right to complain.
Each one of us is guilty when the waiter in a restaurant asks loudly if everything is all right, of saying submissively that it is, even though the meal was rotten or cold, simply because we do not want to cause a fuss. As a young girl I was embarrassed and wanted to run away and hide behind the coats when my mother complained at Clerys or some other store. I thought she was making an exhibition of herself; she was not, rather she was getting value for money. Because she had been reared in rural Ireland in straitened circumstances she valued every penny and watched what she spent and so did not buy blindly.
I had preliminary discussions with Peter Prendergast of the European Commission Office and proposed that whoever had responsibility for consumer affairs should adopt education as a theme when Ireland holds the Presidency of the European Union during the second half of 1996 and should use the special funds made available to the country which holds the Presidency to introduce a nationwide programme to make consumers aware of their rights. I urge the Minister of State, if he has a good relationship with the Minister for Education to encourage her to introduce such an awareness programme, perhaps in the civics class, to make young people aware of their rights to eliminate our craven characteristics when paying for something. When buying a product on credit people are usually so glad to receive the loan that they fall on their knees and thank people instead of saying "I am paying for this, what does it cost?" When I wrote to the Minister for Education about this matter she did not take any great interest in it. Perhaps the Minister of State will be more open to persuasion and now that he has been beatified he will have a clear opportunity to use his sanctity to ensure that the rights of consumers become a tenet of education.
Knowing that Deputy O'Rourke is a practical woman I find it hard to believe she did not agree to insert this provision. It seems obvious it should be included. It is essential to monitor the operation of the legislation. To a great extent, we will depend on the public making complaints and the Government responding to them and this appears to be an excellent mechanism.
I assume that the report will be published in the same way as the report of the Ombudsman and will be the subject of debate not just in Dáil Éireann but in the public arena. Only by adopting this course will we discover if legislation needs to be amended if difficulties are being encountered with and how we should police it. I hope the person who will have responsibility to address any difficulties identified will be the Minister of State, Deputy Rabbitte who is doing an excellent job.
The value of Committee Stage debate has been highlighted in the contributions of members of the Opposition who have studied the legislation in depth and identified loopholes and areas where the Bill needs to be strengthened. This proves that the system works to a great extent. Perhaps we should——
Put the Minister of State back into Opposition for a while.
The Minister of State is equally good in Opposition and in Government.
He has now been beatified.
Perhaps we should consider introducing legislation to tighten up our own activities.
I welcome this amendment. It is important that there is a friendly atmosphere in the consumer offices to encourage people to make complaints. They should also be user friendly. Laying a report before the House does not mean much to the public. It is just another report but by law we must do it that way. We are here to help the consumer and to encourage the consumer to defend his or her position. Many consumers are shy people who may be in difficulty and, for that reason, we must have some mechanism in place that will encourage those people to avail of this facility. I welcome the regionalisation of the consumer offices, particularly the office in Cork.
And Athlone.
I wish there was an office in Mitchelstown. Of course, I do not have the same power and influence as Deputy O'Rourke.
I was afraid Naomh Pádraig, an Coinín, would remove it.
I have to say that the Minister, Deputy Rabbitte, must be a man of many talents.
Is it only now that Deputy O'Keeffe is realising that?
Consumers must be encouraged to avail of the services provided by these offices. There must be a friendly atmosphere so that people who are experiencing consumer difficulties will be encouraged to discuss them with the staff.
I thank the Deputies who have contributed to the debate on this section. The point made by Deputy O'Keeffe about a friendly atmosphere is very important. We must encourage shy people, who might require this service most, to avail of it. I believe shy people will get a great boost from watching this debate on television, although I have the feeling that we are alone here today.
I think 1 per cent of the population watches us.
The media have been screaming at us to reform our procedures, which we have managed to do, but they have not managed to reform. If there is anybody watching us, I believe shy people throughout the country will get a great boost from Deputy O'Rourke's confession that, as a little girl, she ran away and hid behind the coats in Clery's while shopping with her mother.
And look at the way I turned out.
Having regard to the way she turned out, shy consumers around the country will say that perhaps there is hope for them.
Deputy O'Rourke is certainly not hiding behind any coats now.
It is a long time since she hid behind any coats, certainly since she came into the House.
Perhaps for other purposes.
She has great finesse and style also.
I agree with Deputy O'Rourke that this important Bill breaks new ground. It is now so comprehensive it is desirable that it be monitored and assessed, in terms of its performance, after a year. I believe that is reasonable.
On the question of Dáil reform, there is a committee of the House appropriate to the area. I cannot see why the Director of Consumer Affairs should not be invited to present herself before that committee after a reasonable period.
He would love to do that.
He would welcome that opportunity because he is someone who takes a passionate interest in his work, who has an encyclopaedic knowledge of consumer affairs and who has shown himself — before this Bill is even enacted — to be teeing up his in-house procedures in order to implement it. It is unfortunate that reports come into this House, albeit late, are laid in the Library and are never debated on the floor of the House. One of the reasons is that they are brought before the House at a late stage. The practice up to now, in the case of the Director of Consumer Affairs, has not been any different; his reports have been presented to the House approximately a year and a half late. The requirement in this amendment is that he would report within three months of the end of the year. That would make the matters that he is seized of topical and, therefore, may provide an added impetus for the House to discuss his annual report.
There may well be cases under subsection (4) where the Opposition, for example, may demand of the Minister of the day that some particular aspect of the Bill be invoked to cause the director to investigate. In that case, the director can do so and must report to the Minister. This is a fairly significant section that gives us the opportunity to assess the work of the director and monitor the performance of the Bill, which is breaking new ground. Irish consumers, as Deputy O'Rourke says, are not particularly assertive for various reasons; I believe they are becoming more assertive. With some of the pressures that are being brought to bear as this Bill goes through the House, and Deputies are subjected to high powered representations on some aspects of it, one would get the impression that it will be the end of civilisation as we know it if certain sections are enacted. I am reluctant to believe that that will be the case. I do not think the sky will fall if we proceed but, if it does, we can monitor the position and this section will help us. I agree with Deputy O'Rourke that there is a huge education task involved. It is not enough for us to enact legislation that confers additional rights on consumers if we cannot convey that information to the consumer. That will involve a massive education programme. I am not sufficiently familiar with education to know whether this is provided for in the civics course, for example.
It is not.
I cannot think of any good reason why it should not be. I will follow up Deputy O'Rourke's point about the contacts she had initiated in Europe in terms of the upcoming Irish Presidency and what we might do to increase public awareness of the issues covered in this Bill.
Finally, Deputy O'Rourke has so frequently stitched into the record that there will be an office in Athlone that it would make it very difficult for me — not that it would ever cross my mind — to transfer that office from Athlone to another area.
The Minister would be hiding behind the coats if he did.
It is very important that the consumer in Athlone has direct access to the Office of Consumer Affairs.
Amendment agreed to.
Amendment reported.
Amendment No. 28 arises out of committee proceedings. Amendments Nos. 28 and 29 are consequential on amendment No. 30. It is proposed to take amendments Nos. 28, 29 and 30 together, by agreement.
I move amendment No. 28:
In page 17, line 41, after "District Court" to insert "under subsection (9)".
This amendment seeks to amend subsection (6) and to insert after "District Court" the phrase "under subsection (9)". Subsection (9) provides that a person shall not obstruct or interfere with an authorised officer in the exercise of his powers under this Bill or give to an authorised officer information which is false or misleading. In other words, a decision on subsection (6) must be made on the basis of whether there is permission to enter a private dwelling as provided for and as protected under subsection (9).
Amendment No. 29 seeks to insert a new subsection. It sets out the specific terms under which an authorised officer may enter a premises. Amendment No. 30 states:
In page 17, between lines 49 and 50, to insert the following:
"(9) If a judge of the District Court is satisfied on the sworn information of an authorised officer that there are reasonable grounds for suspecting that there is information required by an authorised officer under this section held on any premises or any part of any premises, the judge may issue a warrant authorising an authorised officer, accompanied by other authorised officers, at any time or times within one month from the date of issue of the warrant, on production if so requested of the warrant, to enter, if need be by reasonable force, and exercise all or any of the powers conferred on an authorised officer under subsection (5).".
Following discussion on Committee Stage the Attorney General's office proposed these amendments as additional to the amendments already accepted by the committee.
Are we now in committee?
Acting Chairman
No, recommittal applied only to amendment No. 27.
I remember discussing this aspect of the Bill on Committee Stage but I do not see the necessity for the amendment. The Minister said it was proposed by the Attorney General as being necessary. I suppose it will strengthen the powers of people who wish to make further inquiries. It seems all Attorneys General share one trait, that they gild the lily in terms of powers to be conferred. Tautology seems to be one of the prime requisites of an Attorney General and that characteristic has been evident in the last three Attorneys General. I see nothing wrong with the amendment; I simply wonder why it is necessary. It seems to strengthen the provisions and in that respect is acceptable.
I do not wish to retrace the recent history of Attorneys General and, therefore, I will stay away from that point. Deputy O'Rourke will recall that subsections (6) and (7) were inserted on Committee Stage.
I remember it, but I do not know the context in which they were inserted.
Deputy McDowell raised this point on Committee Stage and pointed to the lack of jurisdiction of the District Court in terms of its powers to issue a warrant and lack of criteria to be applied when an application for a warrant is made. That is the nub of the matter.
It relates to the powers of the District Court.
The District Court did not have jurisdiction in this regard and one must give expression to that fact.
Amendment agreed to.
I move amendment No. 29:
In page 17, to delete lines 42 to 45, and substitute the following:
"(7) Where an authorised officer in the exercise of his powers under this section is prevented from entering any premises an application may be made under subsection (9) authorising such entry.".
Amendment agreed to.
I move amendment No. 30:
In page 17, between lines 49 and 50, to insert the following:
"(9) If a judge of the District Court is satisfied on the sworn information of an authorised officer that there are reasonable grounds for suspecting that there is information required by an authorised officer under this section held on any premises or any part of any premises, the judge may issue a warrant authorising an authorised officer, accompanied by other authorised officers, at any time or times within one month from the date of issue of the warrant, on production if so requested of the warrant, to enter, if need be by reasonable force and exercise all or any of the powers conferred on an authorised officer under subsection (5).".
Amendment agreed to.
I move amendment No. 31:
In page 18, line 21, to delete "section 82 (4)" and substitute "section 83".
This is effectively a tidying up amendment. The reference in page 18 to section 82 (4) is wrong; it should be section 83 and the amendment proposes to amend that incorrect reference. Section 83 provides that a moneylender must issue a written authorisation to this effect to persons engaged in the business of moneylending on his behalf. This requirement was previously contained in section 82 (4), hence the incorrect reference.
Amendment agreed to.
I move amendment No. 32:
In page 19, line 6, to delete "subsection (1) (b)" and substitute "subsection (1) (a) (ii)".
This amendment arises from Committee proceedings. The reference at the top of page 19 which relates to subsection (1) (b) should read subsection (1) (a) (ii). The paragraph states: "he holds a letter of recognition from each undertaking for which he is a credit intermediary". The Director may refuse to grant a credit intermediary's authorisation on a number of grounds including that the applicant does not have such a letter of recognition. The reference to this matter has changed on foot of Committee Stage amendments and the amendment makes provision for that change.
Amendment agreed to.
I move amendment No. 32a:
In page 20, between lines 7 and 8, to insert the following:
"(3) The Director shall, from time to time, publish guidelines to explain the method of calculation of APR under this Act.".
This amendment seeks to insert a new subsection. I dealt with this matter at some length this morning. The amendment provides that the director shall publish guidelines to explain the method of calculation of APR, giving further expression to my intention that the term should be easily understood by all persons. To some extent it is retracing the ground already covered. To go back to the point made by Deputy O'Rourke about public awareness, public education and so on, it is right to require the Director from time to time to publish guidelines to explain the method of calculation of APR.
Colleagues on all sides of the House agree that it is not readily understood by consumers and that it would greatly help the process if a uniform method of calculation was agreed. We should translate that calculation, which is a mathematical one, into words that the ordinary consumer can understand when choosing products on sale so the same APR must be applied by every company. Therefore, the consumer would know they are comparing like with like and can make up their minds on that basis. The Director is being required to publish this from time to time — the situation may change for whatever reason — to bring afresh to the attention of the public the method of calculation of APR.
I remain highly sceptical that APR is ever going to be understood by the ordinary punter. Regardless of the enthusiasm and vigour of the Director of Consumer Affairs, Mr. Fagan, the concept of APR is very difficult to explain to ordinary consumers. Last week and this morning we had a detailed discussion on APR and I am still none the wiser of what APR effectively means.
This amendment seeks to apply the detailed explanation of APR in a general sense to APR under the terms of this Bill and that the Director of Consumer Affairs must from time to time issue guidelines to explain the method of calculation of APR under this Bill. We await those guidelines with great interest. If this amendment will give the Director of Consumer Affairs some divine guidance as to what APR means and he can publish the information on a regular basis, it will be quite useful.
I welcome this amendment as there is a mystique attached to APR. One can draw comparisons between the different APRs in the advertisements of the various financial institutions. Will the Minister clarify what is meant by the phrase "from time to time" in this amendment? When the Bill is finally enacted does the Minister envisage that one of the first exercises of the Director of Consumer Affairs would be to try to clarify for the public the meaning of APR? It is stated that if the guidelines change for APR there is a further necessity to clarify the situation. Would the Minister envisage that the Director of Consumer Affairs would do so initially on publication of the Bill and then six months, 12 months and 18 months later?
We seem to be agreed that understanding the concept of APR is fundamental to the Bill. Members, as well as the public, have convinced themselves that they cannot understand this concept and, therefore, pass over it. It is critically and centrally important to understand it if we are to change the attitudes of consumers because if they conclude that they cannot figure out what the financial institutions are offering them, they are at a serious disadvantage. There are any number of examples. I understand the intention where we started from, that is the European directive was to have a uniform APR across the European Union. However, any of the Sunday newspapers from Britain or here show the variations in advertisements in terms of how this is communicated.
What I have in mind is that the Director, apart from the critical question of the method of calculation could express the APR in terms of how many pounds in a thousand so that people would know exactly where they stood. Deputy Finucane asked if I envisaged that the Director of Consumer Affairs would publish an explanation of the APR immediately on enactment of the Bill and the answer is "yes". I envisage that as his first act he will publish an intelligible, simple, at least as simple as you can make the concept, message and promulgate it as his definition and his understanding of the method of calculation of APR. That is critical. I believe that the Director of Consumer Affairs sees it in that light and he will recognise the central importance of it. It seems to me that he could publish it annually. It goes back to the question as to how we communicate what we have enacted in this House.
We, and the Director of Consumer Affairs, will have to work at communicating a single true APR to the public. If we can give that concept expression in simple language so much the better. For example, in terms of defining it, it could read: the true rate of interest is the rate of discount expressed in annual percentage terms that when applied to the total sum of repayments made on the loan over its lifetime equates that amount to the original value of the loan, taking account of the amounts, timing and frequency of the debiting of instalments of amounts due for repayment and crediting of repayments made to the running accounts of the borrower. It is a very difficult concept. Let us look at the savings side — a financial institution, in this case An Post, is running advertisements — do not hold me to the figures — offering 40 per cent if one leaves their money in for three years or whatever it is. That simple advertising bauble is misleading.
An Post should deliver the letters first.
If we could get the public to take account of this it would be a significant contribution.
I know the Director of Consumer Affairs recognises the central importance of this and that he will as one of his first acts publish an intelligible definition for the purposes of assisting consumers. It is our task to ensure that the question of advertising is addressed in the Bill so that it is uniform across the economy.
Amendment agreed to.
I move amendment No. 33:
In page 21, line 31, before "requirements" to insert "the".
This is a tidying up amendment and is correcting an omission by including the word "the".
Amendment agreed to.
Amendment No. 34 not moved.
I move amendment No. 35.
In page 22, line 2, to delete "11" and substitute "10".
This amendment rectifies an incorrect reference. The offence in question relates to acting as a credit intermediary without the necessary authorisation and acting as a credit intermediary under a different name from that specified in the authorisation. The offence is already referred to but the designation "11" is wrong and should be "10"
Amendment agreed to.
I move amendment No. 35a:
In page 22, line 2, to delete "or 12 (7)" and substitute ", 12 (7) or 117".
Amendment agreed to.
Amendments Nos. 36 and 37 form a composite proposal and it is suggested that they be taken together.
I move amendment No. 36:
In page 22, line 11, after "section" to insert "100 (1).".
This amendment relates to line 11 on page 22 where the reference should include section 100 (1). This would make it a summary offence rather than an indictable one. Line 21 on page 22 would have the effect of deleting section 100 (1) and the word "or". This is to provide for a summary offence in regard to a person or persons engaged in the business of mortgage intermediary without authorisation. Contravention of this requirement was originally an indictable offence but, for reasons of consistency with the offence raised in respect of credit intermediaries, it is being changed to a summary offence. It is linked to an earlier amendment and deletes the reference to section 100 (1) from the list of indictable offences. In other words, in the case of a credit intermediary it was a summary offence so I do not see how it should be an indictable offence in the case of a mortgage intermediary. I am seeking to make them compatible.
I welcome that. It would have been severe to make it an indictable offence as those involved in business could be deprived of directorships or managerial functions. We must be more humane in our approach. A fine or other type of punishment is more acceptable. Making it an indictable offence would have been extreme. The Minister may review the matter after 12 months and he is wise to make it a summary rather than an indictable offence.
Amendment agreed to.
I move amendment No. 37:
In page 22, line 21, to delete "100 (1) or".
Amendment agreed to.
Bill recommitted in respect of amendment No. 38.
I move amendment No. 38:
In page 22, line 38, to delete "£1,000" and substitute "£1,500".
A person guilty of an offence under the Bill shall be liable on summary conviction to a fine not exceeding £1,000, or imprisonment for a term not exceeding 12 months, or both. The maximum fine on conviction for a summary offence has been increased from £1,000 to £1,500. That is a jurisdictional decision and we have no choice but to accept it. When the Bill was introduced the fine of £1,000 was correct and it must now be amended to £1,500.
There was a long delay before there was any change in the top range of fines that could be imposed by the District Court. When dealing with health and safety legislation I remember firms which had committed quite horrendous crimes could not be fined more than £1,000. We depended on the Department of Justice to make the change. I lobbied to raise the fines which could be imposed by District Courts. This amendment reflects what the Department of Justice implemented.
Amendment agreed to.
Amendment reported.
Amendment No. 39 not moved.
Amendments Nos. 39a, 39b and 39c may be discussed together.
I move amendment No. 39a:
In page 24, line 11, to delete "passing" and substitute "commencement".
This amendment is a technical requirement based on advice received from the Attorney General. These amendments are subsequent to my earlier amendment providing for commencement regulations. I made an amendment in respect of the commencement regulations——
July.
That is correct. The advice from the Attorney General is that these are consequent on this amendment.
It is sensible because when a Bill is passed it does not mean it will be implemented there and then. The word "commencement" means when the Bill comes into effect.
Amendment agreed to.
I move amendment No. 39b:
In page 24, line 14, to delete "passing" and substitute "commencement".
Amendment agreed to.
I move amendment No. 39c:
In page 24, line 15, to delete "passing" and substitute "commencement".
Amendment agreed to.
I move amendment No. 40:
In page 25, to delete lines 25 to 28.
Amendment agreed to.
Amendment No. 41 is in the name of the Minister. Amendments Nos. 42 and 43 form a composite proposal and it is suggested, therefore, that amendments Nos. 41, 42 and 43 be taken together.
Bill recommitted in respect of amendments Nos. 41, 42, 43 and 44.
I move amendment No. 41:
In page 26, line 23, to delete "an offence under" and substitute "contravening".
Amendment agreed to.
Section 29 (3) now states:
In any proceedings contravening this section it shall be a defence for the accused being the provider of credit in relation to an advertisement which contravenes this Part to show that it was displayed or published without his consent or connivance or that he made reasonable efforts to ensure that it complied with this Part or to prevent its publication.
The amendment is purely textual. The word "contravenes" is a more economic expression than the words "an offence under". I am sure Deputy O'Rourke will say——
What about the word "purports"?
This is the advice we get from the Attorney General, but I am sure there is a good reason for it.
Amendment No. 42 relates to section 29 (3) and provides that in page 26, line 25 that the word "contravenes" should be deleted and substituted by the words "does not comply with". I presume there is a good reason for that but at this hour of the evening it frankly escapes me.
That should be writ large.
Amendment No. 43 deals with section 29 (4) and provides that in page 26, line 29 that the words "an offence under" should be deleted and substituted by the word "contravening". The recommendation is that these amendments are purely textual in nature, they tidy up the Bill, their addition is good law and I am prepared to accept the advice of my betters on it.
We had an argument this morning on an earlier amendment about the word "purports". Deputy Lynch became ecstatic about the wonderful work achieved by deleting the word "purports" and substituting it with, as far as I recall, the simpler word "offers". These amendments relate to the deletion of the words "an offence under" and their substitution by the word "contravening". I cannot see how that makes the Bill more open to anybody. While the Minister was speaking, I sniggered and said to myself plus ca change, plus ca la même chose. The Attorney General could not keep his pokey nose out of this Bill and I presume the new Attorney General must have an equally pokey nose because, despite the best efforts of our parliamentary draftsman and officials, the Attorney General appears to have a fetish about scrutinising every word and decides that the words in this section have to be changed. It reminds me of some character in Alice in Wonderland who asked, “why?” and the other character replied “because I said so”. Having regard to the recent change of Ministers, Governments, coalitions, honey pots, Attorneys General and so on, it is funny that the new Attorney General wants these changes because he says so. I am not going to enter into an argument about these amendments at this hour but they open one's eyes to how “official dum” and “official dee” get on; they will get their way. The use of simple language is surely the best way to proceed.
In defence of the Attorney General I would like to think he was doing his work with regard to legislation. When the parliamentary draftsman prepares legislation like this, it is necessary to seek the views of the Attorney General. I do not consider that any criticism should be made of the Attorney General if he considered amendments should be made to the legislation. In the past when matters were not properly executed the Attorney General was accused of being less than vigilant.
Deputy O'Rourke's point was well made. She referred to Deputy Lynch who said that perhaps it is healthy for Members to spend some time in Opposition before they become Ministers. Similarly it is healthy for those who have had the honour of serving as Ministers of State to spend some time in Opposition to see the other side of the coin. Deputy O'Rourke made a straightforward point that nothing changes for those who serve the Ministers. The Minister was honest enough to say he was not sure what all this was about, but that it makes better law. It was refreshingly honest of him to say that. I support the point made by my colleague. Perhaps it would be appropriate for this Minister or any Minister — I appreciate it is a complex Bill — not to take the pat answer that such amendments make better law.
As a lay person, the words "contravene" and "does not apply with" mean the same. The lesson to be learned from this exercise regarding protecting the consumer is that legislation should contain user friendly language. Deputy O'Rourke, and others, referred to the need to educate people to make them more forceful about making complaints and I support that. One of the areas for which I had responsibility when I was Minister of State was European affairs and the Communicating Europe initiative and we undertook some work to get the message effectively across. I hope the Government will pursue that agenda also. The lesson to be learned regarding the language in legislation is that we should not abide by old traditions for the sake of legal pettiness and include certain language for which there was a precedent. The point was well made by my colleague whom I support.
Some interesting points have arisen from what appears to be a straightforward textual amendment. To the lay person sections of legislation can appear gobbledegook, but the fact that they appear so does not mean they are wrong. It is difficult to give expression in legal terms to some concepts and at the same time be simple. That is precisely where the role of the Director of Consumer Affairs comes into play. It is correct for the parliamentary draftsman to make corrections as he sees fit where the wording is sloppy, imprecise or whatever. However, the Director of Consumer Affairs has a different task, that of managing to communicate in a simple intelligible form to the consumer. They are two distinct roles. I am sure the present Attorney General would not thank me if I said I had formed the view he is a man with a safe pair of hands because in the case of the last Attorney General about whom that was said — perhaps it was an epithet that was earned, depending on one's point of view.
It got the Minister of State where he is anyway.
I am indebted to him; incidentally, he is a very nice gentleman. It is not every Attorney General who has managed to switch power in the House in the course of the lifetime of a Parliament without a general election, for which the former Attorney General has earned his footnote in history. However irksome it is for us legislators that these things are picked up. I sometimes wonder if there were, say, ten stages to processing a Bill rather than five whether we would continue to have these textual type——
Revisitings.
——revisitings occurring ad infinitum. If, say, a lawyer or draftsman in the Attorney General's office had time to redraft this Bill — as they probably will before the Seanad debate — some light would be brought to bear on aspects of it that would give an insight we do not have. While the process may be irksome, I hope the Bill will be all the better for it.
These tidying up amendments are no more than that; in the view of the parliamentary draftsman they constitute a more economic expression of the law. It is the separate, different and distinct task of the Director of Consumer Affairs to translate that into language that the ordinary man and woman in the street can understand.
Amendment agreed to.
I move amendment No. 42:
In page 26, line 25, to delete "contravenes" and substitute "does not comply with".
Amendment agreed to.
I move amendment No. 43:
In page 26, line 29, to delete "an offence under" and substitute "contravening".
Amendment agreed to.
I move amendment No. 44:
In page 26, line 42, to delete "an" and substitute "a summary".
This amendment proposed by the draftsman clarifies that contravention by the provider of credit of any provision of Part II relating to advertising and offering of credit is a summary offence. To be consistent, it is appropriate that we clearly specify that it is a summary offence rather than an offence, the District Court being the court of jurisdiction. We have already dealt with the relevant penalties.
It is merely a repetition of "a summary"?
Yes.
Amendment agreed to.
Amendments Nos. 41, 42, 43 and 44 reported.
Amendment No. 45 in the name of the Minister, to which amendment No. 70 is related. With the agreement of the House it is proposed that they be discussed together. Agreed.
I move amendment No. 45:
In page 27, to delete lines 33 to 39, and substitute the following:
"(b) contain a statement that the consumer——
(i) has the right to withdraw from the agreement without penalty if the consumer gives written notice to this effect to the creditor within a period of 10 days of the date of receipt by the consumer of the agreement or a copy thereof, or".
I refer Deputies to Part III which deals with the form and content of credit agreements. I think Deputy O'Rourke promised to table an amendment on Report Stage which is why this one has been tabled. This is a redraft of the provisions regarding the right of a consumer to a ten-day cooling off period; the intent is not changed in any way, merely the wording. On Committee Stage we all agreed that this was one of the attractive provisions of this Bill in that, if and when one was entering into a credit agreement, one would have ten days in which to reflect on whether or not to proceed. This subsection merely specifies how a consumer can secure that protection — the consumer can walk away from the agreement, without penalty, provided he or she gives written notice to this effect to the creditor within a period of ten days. In all the circumstances that is reasonable. The consumer's explicit right is enshrined in the Bill. To paraphrase the old adage —"marry in haste, repent at leisure"— in this case "enter into a credit agreement in haste——
One cannot send back one's husband if one does not like him.
My colleague, the Minister for Equality and Law Reform, is dealing with that possibility. While I am not sure it would be covered by the provisions of this Bill, there are certain circumstances in which he can be legally jettisoned, of course, assuming that Deputy O'Rourke brings the remainder of her great party with her. In the meantime, we are restricted to consideration of this Bill which affords the consumer ten days protection if a creditor is given written notice. The intent is not in any way to diminish the right or change its import but merely to change the wording.
I cannot see any difference except that —"without penalty" is included in the amendment as distinct from being included in the heading leading into the paragraph. I suspect this is more of what we saw earlier but I hesitate to give vent to further condemnation of specific people.
This part of the Bill is welcome in that where a person enters into an agreement he may write within ten days withdrawing from the agreement. I am pleased the Minister will include this in the Bill.
This is very serious. If a person makes a substantial agreement with a trader or a business person and ten days later withdraws from that agreement it could result in extra costs for the business person. Insincere agreements made over a pint or several pints could put a business person in serious difficulty. What protection is provided for the business person who does not accept the breaking of the agreement? The Bill must protect both sides. We are here to legislate in an even handed and honourable fashion. A small firm, business or sole trader could easily be put out of business by the availability of that provision. He may order an item from a trader who would not accept a cancellation of the order. He could be left with an item on his shelf valued at say £10,000 due to agreement being withdrawn. A person who may be a valuable asset to the community could be put out of business. I would like to think we were even handed in our approach to the legislation.
It is not the purpose of the Bill to put creditors at a disadvantage. It is a consumers' Bill.
The consumer is being put at an advantage.
It is a consumers Bill and there is no point in my trying to sell it as a creditors' charter. It is making certain consumers' rights explicit. The ten day period in which an agreement may be withdrawn applies across the board so that no person is put at a competitive disadvantage. Having regard to the type of agreement we are talking about, provided everybody is playing on the same level playing pitch, I cannot see how one creditor would be disadvantaged since the same rule applies for all.
On a point of order, will the Minister of State tell me what is the difference between what was in the Bill and what he is putting forward?
It is only a tightening up of the language. The language is somewhat more sloppy in the original Bill but the effect is the same. The Deputy will see that "without penalty" appears in the main clause rather than in the introductory clause but the effect is the same. It is not a diminution of the ten day respite. It is the same idea in sharper language.
Amendment agreed to.
Amendment No. 46 has already been discussed.
Will the House agree to adjourn at this stage? It has been a long day. I understand the Minister will agree to that proposition.
I would have no objection. I have been here since 10.30 a.m. as has the Minister.
Is that a formal proposal?
As Deputy O'Rourke has said, we have been here since 10.30 a.m.
The mechanics of this would be that we move on to the next business.
Will they know about it in the offices?
That is precisely the question.
In the circumstances, I withdraw the proposal.
I remind the House that we must adjourn in 30 minutes' time for Private Members' Business.
I do not disagree with the proposition.
It is highly unlikely that people in the offices would expect this business to cease considering the number of amendments tabled.
If the House agrees, we can take the sos at 6.30 p.m. rather than at 7 p.m.
There is no sos at 7 p.m.; we proceed to other business at that stage.
Are we not entitled to a sos if the House agrees?
Is the Minister proposing that the sitting be suspended?
If the House agrees, I am very happy to propose that we adjourn for 30 minutes.
Is that agreed? Agreed.
Debate adjourned.
Sitting suspended at 6.30 p.m. and resumed at 7 p.m.