Loan Companies: Interest Rates

Debate between Lord Marlesford and Baroness Wilcox

Thursday 3rd November 2011 Lords Chamber

[Baroness Wilcox]

We certainly agree that there should be free debt advice and we will continue to provide it. I think the noble Lord also asked about debt management companies. We are concerned about these. The Office of Fair Trading has recently taken action in this area and we are working with the industry itself on how we can resolve these issues. Good people in the industry do not want the bad people in it because they give them all a bad name.

[Lord Marlesford]

My Lords, are the Government at all concerned about the fact that there is some £60 billion of outstanding credit card debt on which interest rates of 17 per cent or more are being charged? Much of this is non-performing. Does that not cast something of a shadow over the balance sheets of the banks?

[Baroness Wilcox]

We are working hard to bring under control unsustainable borrowing and irresponsible lending—between which lots of bad things happen. There is no doubt that good information is terribly important for people to be able to make decisions. However, the Government are not risk averse to the freedom for our people to make decisions and take risks—and fail. We want our people to be free to succeed and that means that some of them will fail.

Consumer Credit

Debate between Lord Marlesford and Baroness Wilcox

Thursday 3rd February 2011 Lords Chamber

[Lord Marlesford]

My Lords, are the Government concerned at all that at the present time there is some £60 billion of credit card debt, on which some £9 billion a year of interest has to be paid, and that a large number of the debtors of this credit card debt are unable to pay the interest? Do the Government recognise that this probably represents a substantial reservoir of toxic debt held by the banks of this country?

[Baroness Wilcox]

My Lords, there are enormous worries surrounding such debt. This is why the consumer credit and personal insolvency review is taking place. I am sure that the review would be open to hearing any evidence that the noble Lord might like to give. However, we cannot answer any questions now, until just before the Budget, so that will be in about April.