Loan Companies: Interest Rates

Lord Alton of Liverpool Excerpts

Thursday 3rd November 2011 Lords Chamber

[Baroness Wilcox]

The noble Lord, Lord Kennedy, has covered three big items. I know what an expert he is on the last one, so I will leave that for the moment. This Government and the previous Government have looked again and again at capping interest rates, but our worry has always been that that would push people towards illegal money lending. We then do not know when they are in trouble and they can be treated very violently. Even looking to see whether we should be changing this in any way is a new venture for us. The noble Lord is absolutely right in his second point. People should have the right information on which to base their choices.

[Lord Alton of Liverpool]

Has the Minister seen the latest figures for personal debt, showing that a staggering £1,450 billion is owed in personal debt by the nation at the present time? If it is right—and it is—to reduce national debt, should we not be doing far more to help families who are massively in debt in Britain today, especially through the promotion of credit unions?

[Baroness Wilcox]

We have tried and continue to try to see how we can get people to set up credit unions. They are so popular in America, Australia, Canada and Ireland, but we just do not seem to like them in this country. However, we are continuing to struggle to do that. The noble Lord is right about total household debt: £1.45 trillion is an enormous figure, but of that £1.24 trillion is owed on mortgages. We are a real country for buying our own houses and taking out mortgages. The amount left over is the money owed on personal loans, credit cards and high-cost credit. For this, we must make absolutely sure that people have the right information before they get themselves into difficult situations.