In Parliament last night, I voted to support a cross party amendment to the Financial Services Bill which would have allowed the regulator to cap the cost of credit if a financial product was judged to cause ‘consumer detriment’. Despite the support of several Conservative MPs, the Government whipped its MPs to reject the amendment.
They took this action despite the fact that on the very day, new research was published which showed that 98% of MPs and 93% of the public believe there is a problem with payday lending. 66% of MPs and 65% of the public also support a cap on the total cost of credit.
People in Hyndburn are suffering in our current economic climate as the cost of living rises, wage freezes and unemployment hit their household incomes. To make ends meet people borrow money at extortionate rates of interest, and that can cause a cycle of debt for many. It is a shocking fact that one in three payday loans being taken out to pay off other payday loans.
This amendment to the Financial Services Bill would have sent a message to the industry that their worst excesses would no longer be tolerated. Despite saying they support action, too many Government MPs didn’t have the guts to stand up for the people they represent.
The fight now goes to the House of Lords, and everyone who lives in Hyndburn should know that even though the Government may choose to sit on his hands Labour will continue to campaign to end legal loan sharking in the UK