Oral Answers to Questions

Debate between Baroness Chapman of Darlington and George Osborne

Tuesday 6th March 2012 Commons Chamber

[Mr Osborne]

Of course we will listen to any proposals put to us. Clauses 69 to 76 include a new requirement on both the new bodies we are creating—the prudential regulator and the financial conduct regulator—to make a report when a regulatory failure has occurred. That trigger will be set out in the legislation, so we are providing additional powers to require reports when things go so badly wrong, as they did a few years ago.

[Mrs Jenny Chapman (Darlington) (Lab)]

The financial service from which my constituents most need protection is high-cost lending. The Chancellor’s remarks so far go nowhere near far enough in protecting consumers. We need a range of caps and we need some properly enforced regulation of advertising. When is the Chancellor going to do something about this?

[Mr Osborne]

I completely understand the concern about excessive and very high interest charges, which have been a problem for many years. I think it is better to tackle the specific abuses. The Government are conducting a review of the cost of credit to consumers, but by tackling very specific abuses such as the roll-over of loans and the use of continuous authority, we think we are getting to the really hard cases and abuses that we want to see ended. I have to say—this was certainly the view of the previous Government, too—that although it could be worth looking at, simply introducing a cap might have the effect of pushing a lot of people into a completely unregulated black economy. I am not sure that any of us would want to see that.