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Credit: EC Action

Volume 460: debated on Wednesday 9 May 2007

To ask the Secretary of State for Trade and Industry what assessment he has made of the likely impact of the EU Consumer Credit Directive on UK consumer spending in the (a) year following its implementation and (b) two years following its implementation. (135972)

The DTI published an up-dated impact assessment in 2006 on the revised proposal for a Consumer Credit Directive. Our assessment then was that it could impose potential costs on lenders and lead to a possible reduction in access to credit among consumers, both of which could have a negative impact on consumer spending. Since then the proposal has been through a number of re-drafts and we think this risk has been very much reduced. It is not practicable to make any further assessment of the impact of the proposal post-implementation at a time when the text is subject to frequent change. We will be up-dating our impact assessment in the light of the final text if and when the directive is agreed. I will write to the hon. Member as the impact assessment is updated—and place copies in the Libraries of the House.

To ask the Secretary of State for Trade and Industry what assessment he has made of the likely impact of the EU Consumer Credit Directive on UK consumer spending, with particular reference to (a) the overall cost of credit, (b) the ability to obtain credit and (c) access for people on low incomes to legal credit. (135973)

The DTI published an up-dated impact assessment in 2006 on the revised proposal for a Consumer Credit Directive. Our assessment then was that it did put at risk the diversity of credit products and could drive up costs and prices and lead to a reduction in the availability of credit particularly to the sub-prime market. Since then the proposal has been through a number of re-drafts and we think this risk has been very much reduced. Negotiations are ongoing and we will be up-dating our impact assessment in the light of the final text if and when the directive is agreed. I will write to the hon. Member as the impact assessment is updated and place copies in the Libraries of the House.