Small Business, Enterprise and Employment Bill

Debate between Lord Mitchell and Lord Newby

Wednesday 7th January 2015 Grand Committee

[Lord Newby]

I think, my Lords, that that concern is dealt with by the fact that approval or agreement that data might be shared tends to take the form of being included in the standard terms and conditions of the bank, so one will not be able to pick and choose. One will be presented with a standard form that states, “You agree to the following forms of data being used”. There will not be much scope for negotiation as to which data are open for discussion.

[Lord Mitchell]

I should like to respond to the Minister by thanking him for his support on the subject of payday lending. There were some dark days in this three-year campaign, and he and I had private meetings in which he gave me a lot of encouragement. Me saying that from this Dispatch Box will have totally ruined his career, but he was very supportive and for that I am grateful. I thank him for the points he made, which are helpful. We will, of course, come back to all this on Report. I beg leave to withdraw the amendment.

Payday Loans: Advertisements

Debate between Lord Mitchell and Lord Newby

Thursday 3rd April 2014 Lords Chamber

[Lord Mitchell]

To ask Her Majesty’s Government what steps they are taking to reduce the number of payday loan advertisements watched by children.

[Lord Newby (LD)]

My Lords, payday loan adverts are subject to the Advertising Standards Authority’s strict rules. The ASA will not hesitate to ban irresponsible adverts. The Broadcast Committee of Advertising Practice is currently considering the issue of payday loan advertising on children’s TV and the potential implications for ASA regulation. The Financial Conduct Authority has introduced new requirements on payday lenders, including mandatory risk warnings and signposts on debt advice in adverts. It can ban misleading adverts that breach its rules.

[Lord Mitchell (Lab)]

I thank the Minister for the reply. Daytime television, my Lords, is deluged with advertisements for payday loans, many of them including fluffy puppets, catchy jingles and smiley people. Children see these advertisements and, not surprisingly, when family money is tight, they pester their parents to take out these loans. I intend to table a Private Member’s Bill to ban all advertising of high-cost, short-term loans until after the watershed. Will the Government support me?

[Lord Newby]

My Lords, I think it is right first to set out the scale of the problem. I am not doubting that there are issues, which is why the Broadcast Committee of Advertising Practice is looking explicitly at this matter. However, to set the issue in context, payday loan adverts in 2012 comprised 0.6% of TV ads seen by children aged four to 15, and, last year, all personal debt ads on children’s television amounted to 0.2% of total ad spend on children’s television. I am not saying that it is not an issue, but the number of ads being watched by children in this area is relatively modest—hardly more than one a week.

Payday Loans

Debate between Lord Mitchell and Lord Newby

Wednesday 11th December 2013 Lords Chamber

[Lord Newby]

Almost certainly too high, my Lords.

[Lord Mitchell (Lab)]

My Lords, in 2008, 12 million people viewed advertisements for payday lending companies. Last year, the total was 7.5 billion. Do the Government feel that the time has come for us to ban advertising for payday lending on television, particularly when it is directed at children?

[Lord Newby]

My Lords, the Advertising Standards Authority has been looking at a rising number of complaints about payday loan advertising on television. It has the power to ban misleading ads and already has done so in respect of ads placed, for example, by Cash Lady and FirstPayDayLoanUK. From April next year, the FCA will have the power to ban misleading financial promotions. It will be able to look at advertising and the whole way in which payday loans are promoted under that new power.

Small and Medium-sized Enterprises

Debate between Lord Mitchell and Lord Newby

Monday 29th October 2012 Lords Chamber

[Lord Newby]

My Lords, the figures so far published do not take account of the impact of Funding for Lending, which only opened in August, and not least because it takes some time for loan approvals under the scheme to be finalised. I absolutely agree that promoting the scheme will be crucial. We are encouraged by the steps that the banks and building societies have already taken to do so, including double-page advertisements in national newspapers and promoting mortgage products very actively, not least through their websites. The Bank of England is administering the scheme but the Treasury is directly involved in monitoring it via a joint oversight board with the Bank.

[Lord Mitchell]

My Lords, Funding for Lending is the very latest of a whole plethora of programmes announced by the Government to stimulate SMEs. But here is the truth: very little of the money is getting through to the SME community. Why is that? It is because the chosen method of distribution is through the high street banks, and their interest is more in stuffing their own balance sheets rather than advancing funds for SMEs. When will the Government realise that the banks are chronically risk-averse and ill suited to this important task?

[Lord Newby]

My Lords, it is simply not true that the banks are stuffing their balance sheets as a result of this scheme. This scheme gives the banks incentives to lend, not to stuff their balance sheets. There is considerable evidence that the banks are offering loans to SMEs at significantly lower interest rates and offering new mortgage products. These are already beginning to generate new business.