Consumer Credit and Debt Management

Lord Walney Excerpts

Thursday 3rd February 2011 Commons Chamber

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

It is a pleasure to speak in this debate and to follow the hon. Member for Calder Valley (Craig Whittaker), who spoke well about an area that I know well and where I have relations. I add my congratulations to my hon. Friend the Member for Walthamstow (Stella Creasy) on showing the leadership to get this motion on the Order Paper today and to publicise it. She has been an example to us all.

This has been a good debate. Many hon. Members have spoken well and made excellent points. If the vast majority of hon. Members accept that there is a significant problem, it is a question of what the Government can and should do about it. As one hon. Member said, there is a legitimate argument in favour of funding financial inclusion education in early-years education. Partly because of the progress made in recent years, that is necessary, but it is not sufficient on its own. We should welcome the fact that 350,000 loans have been made by the not-for-profit sector, but that is not enough, and the enormous problem of people being charged appalling rates of interest remains.

The question is this: if the Government decide that they cannot allocate the funds that they have allocated previously, can they take regulatory action to improve the situation and make a genuine difference? That is why I am disappointed by the response of some Government Members. They have a far greater grounding in such matters than I do and have spent much of their previous careers and parliamentary time in dealing with this issue, but they have not grasped the nettle, and they will not support the motion. Instead, they are taking a course of action that will ultimately delay things and put the matter in the hands of a regulator that has not been given sufficient political direction to tackle the problem head on.

[Lorely Burt]

Will the hon. Gentleman give way?

[John Woodcock]

If the hon. Lady does not mind, I will not take interventions because we need to hear as many speeches as we can.

The Conservatives and Liberal Democrats, when they were the opposition, spoke well of the need to tackle the level of debt in society and pointed out some faults in the previous Government’s policies. Now is their chance to do something.

Labour must accept that although we must protect people’s right to choose, we must not continue to give unscrupulous companies a means to exploit people. I hope that the Consumer Credit (Regulation and Advice) Bill, which my hon. Friend the Member for Walthamstow introduced, promotes credit unions. I am deeply proud of Walney Island credit union, which was set up by Churches in response to mass redundancies at Barrow shipyard to help people through those enormously difficult times. We should no longer tolerate the gap being filled in this way while alternative forms of credit are introduced.

In our privileged financial position, we have no need of loans of the kind regularly taken out by the poorest members of our society, but my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) spoke so well about the choice that she would probably have ended up making in desperation had she been in a situation in which she did not have enough money to get through Christmas.

The freedom to make choices is important, but it is ultimately part of the Government’s role to prevent us from being exploited and making the wrong short-term choices when in a desperate situation. That is what this debate is about, and I hope that Members on both sides of the House will support the motion.