High-Cost Credit and Debt Management

Lord Watts Excerpts

Monday 10th October 2016 Lords Chamber

[Lord Young of Cookham]

The answer to the last part of the noble Lord’s question is in relation to what happened with the introduction of the right to buy, back in the 1980s. There was some mis-selling by mortgage brokers, targeting council house tenants who had the benefit of a huge discount. They were not really interested in the creditworthiness of those people as mortgage borrowers and that is why that measure was introduced. On cold calling, the Government will introduce legislation through the Digital Economy Bill which will place, via the Information Commissioner, a statutory obligation on a code for cold calling. In this year’s Budget, additional provision was made to protect particularly vulnerable people from cold calling.

[Lord Watts (Lab)]

My Lords, should not the Government take action now to put a finite figure on what credit organisations can charge? Normally, the poorest people in the community pay the highest rates of interest.

[Lord Young of Cookham]

The noble Lord is quite right. That is why we introduced a cap of 0.8% on payday loans. That means if you borrow £100 for a day, the maximum amount that can be paid in interest is 80p.