Consumer Rights Bill

Baroness Howe of Idlicote Excerpts

Monday 3rd November 2014 Grand Committee

[The Lord Bishop of Norwich]

My Lords, I rise to support the noble Lord, Lord Alton, and to speak to Amendment 105B, in the name of my colleague the right reverend Prelate the Bishop of Truro, on the advertising of payday loans. He cannot be here today but has been working very closely with the Children’s Society on this issue. Amendment 105B seeks to make provisions to restrict the times at which payday loan advertisements are shown, most specifically in relation to the watershed.

It surprised me to discover that, according to Ofcom, no less than 80% of all payday loan advertisements are shown before the watershed. It is therefore no surprise—to pick up on some of the statistics that the noble Lord, Lord Alton, mentioned—that the Children’s Society found in its survey that over half of all children aged 10 to 17 reckon that they see payday loan advertisements either “often” or “all the time”. It is the sheer quantity of these advertisements that normalises payday loans for children and young people. The research shows that one-third of all teenagers think that the payday loan adverts themselves are tempting and exciting—they are very well designed. Those teenagers are much more likely than their counterparts to say that they would consider taking out a payday loan in the future.

It is sometimes argued that these advertisements are not aimed at young people. However, we can see from the surveys how much they have affected the way that young parents in particular manage their money. The report, Playday Not Payday, showed that 40% of parents aged 18 to 24 polled by the Children’s Society said that they had used a payday loan—no less than four in 10. It is interesting that the number halves for those in the next 10-year age category and halves again for those aged 35 to 44. So the younger an adult is, the more likely they are to have taken out a payday loan. That makes me think that these loans are not being taken seriously by young people, serious though they are. We have allowed them to take over our televisions and radios, normalising them to the point where their use is seen as casual. Just this morning I was told the story of a young woman who took out a payday loan to pay for a Domino’s pizza. That could prove to be a very expensive pizza indeed. Of course it is a small amount used for an everyday purchase that becomes ever larger in terms of the debt that you incur. So I ask the Minister what steps we can take to ensure that payday loans are always portrayed as a serious form of credit with very high risks. The current advertisements do not present them as a serious form of credit with high risks.

Action is being taken: the noble Lord, Lord Alton, mentioned the Broadcast Committee of Advertising Practice and its consultation. However, it is disappointing that that only relates to the content of these adverts and not to their scheduling. So it will not help the 72% of teenagers who see a payday loan advert more than once a week. I hope, therefore, that the Minister will understand that this amendment seeks specifically to reduce the frequency and volume of payday loan adverts on television and radio.

In that regard, it would do something to counter the rather poor money management education that most children say they receive. Only one in five children aged between 10 and 17 feels that their school teaches them anything about money management. Not many more feel that their parents have taught them much about management, and yet half of them are seeing adverts often or all the time.

This year, 2014, marks the 50th anniversary of the watershed. It was put in place to assure parents that their children were watching only television that was appropriate. That is why we should use the watershed to cover payday loan advertisements. We have an opportunity here, and I look forward to the Minister’s response.

[Baroness Howe of Idlicote (CB)]

My Lords, I welcome and support the amendment in the name of my noble friend Lord Alton of Liverpool, and particularly the point he made, echoed so eloquently by the right reverend Prelate the Bishop of Norwich, about the importance of the pre-watershed period. There needs to be a time when all the things that we have heard about are not available to be seen by children. It is hugely important that we all stress this, and I am certain the Government will be firmly behind it all.

The frequency and volume of adverts for payday loan companies and things like that concern me—I cannot remember the last time I turned on the radio or the TV without seeing a dancing puppet or a singing satsuma offering me a quick and easy loan. It must be tackled any way that we can. The pre-watershed period is vital. The Government must take and act on the serious point being made about this, and I hope that all colleagues here, including the Government, will support the amendment.