Legal Aid, Sentencing and Punishment of Offenders Bill

Debate between Baroness Chapman of Darlington and Bill Esterson

Tuesday 17th April 2012 Commons Chamber

[Bill Esterson]

My hon. Friend has made an excellent point about the Government’s claimed support for young people. She could add that they have said that they will speed up the court process for adoption, which has been an absolute disgrace for far too long. This attack on vulnerable young people—in particular, children in care—will set back the cause of those people, who have the weakest life chances of pretty much any group in this society.

[Mrs Chapman]

My hon. Friend speaks with considerable personal experience of this issue, and I take what he has to say extremely seriously.

Finally, were there time, and had today not been so ridiculously compressed, we would have also dealt with Lords amendment 170, tabled by Lord Lloyd of Berwick. It is a just and economically intelligent amendment. It is to the Government’s shame that they have not accepted its minor expense, which would help so many people who have suffered greatly through clinical negligence.

Consumer Credit and Debt Management

Debate between Baroness Chapman of Darlington and Bill Esterson

Thursday 3rd February 2011 Commons Chamber

[Mrs Jenny Chapman (Darlington) (Lab)]

The United Kingdom is lagging behind on the regulation of consumer credit. The UK’s poorest borrowers pay the highest price for credit in Europe. Fifteen American states have now dealt with payday loans, and the cost of credit is also capped for all US servicemen and women. Even President Bush could see that his soldiers needed protecting from excessive interest and administrative charges. In the United States, the Centre for Responsible Lending estimates that credit regulation saved consumers $2 billion in 2009. We know that payday loans frequently leave borrowers unable to pay other debts.

Much is made by the industry of the possible unintended consequences of regulating payday loans, but research such as that from the university of North Carolina shows that restrictions on payday loans had no significant impact on the availability of credit for households in North Carolina. In fact, more than twice as many former payday borrowers reported that the absence of payday lending had had a positive rather than negative effect on their household. The state’s regulation helped more households than it harmed.

[Bill Esterson]

My constituent, Mark Billard, wrote to me recently. He said:

“Most US states and European countries have a legal limit to stop lenders charging whatever they want.”

That point has also been very well made by my hon. Friend. Does she agree that the danger of the amendment is that it would reduce the chances of such legal protection for those most in need of help?

[Mrs Chapman]

My objection to the amendment is that this is a Back-Bench debate, and it should be an opportunity for Back Benchers to express their views.

The New Economics Foundation published a report in 2008 that included evidence that restricting payday loans did not push people into illegal borrowing. Rather, the market for affordable loans actually strengthened in such circumstances. In America, small mainstream loans for less than $600 became more widely available following a clampdown on payday lending, as aggressive marketing by payday lenders disappeared.

We have heard it argued that caps on credit in France and Germany have led to reduced access to credit for the least well-off, but that argument rests on evidence from a narrow base of research. In fact, restrictions on access to all kinds of credit vary between Britain and other European countries. It is argued that borrowers know what they are doing and should jolly well live with the consequences, but the individuals getting into trouble with these loans are desperate. They are not in a position to shop around. Their problems, as well as their credit, are compounded until they are no longer able to cope.