Jacob Rees-Mogg
Main Page: Jacob Rees-Mogg (Conservative - North East Somerset)
Cathy Jamieson
I thank my hon. Friend for that intervention; I know her, too, to be someone who takes the issue seriously. She has done a lot of work on it. Indeed, this is such a high-profile issue—so many people are affected by it and so many external organisations are showing their concern or producing evidence, be they case studies or detailed research—that this would be an opportune moment to take the Bill forward and probe the issue further. The role of Parliament is important, and the fact that so many Members wish to speak this morning shows that there is further scope to debate the Bill in Committee, which is what I would certainly like to happen.
Jacob Rees-Mogg
It concerns me that the Bill would give too much flexibility to the FCA and allow it too much arbitrary power. This House should be concerned about that issue on Second Reading.
Cathy Jamieson
I hear what the hon. Gentleman is saying, but I would have thought—again, because I know him to be someone who would take a great deal of care and consideration looking at the detail of the Bill in Committee—that, with his intellect and interest in these matters, he would have been an asset to any Committee that wished to consider the matter further.
I am surprised and rather disappointed. The Minister herself raised issues about advertising and she seemed to be in agreement in principle with many of the provisions about how lenders should be obliged—although I think she suggested voluntary measures, and I am not sure that that would work—clearly to display the interest payable in cash terms. That is important so that consumers know exactly the position they would be in and could compare the costs of borrowing. The Bill would allow that consistent approach to be determined by the Financial Conduct Authority.
As I said, and as seen in contributions by hon. Members and the Minister, advertising is an important issue. We have probably all received some of these text adverts attempting to make us believe that we are somehow entitled to take out a payment protection insurance claim and that there is £500 or £800 just sitting there waiting for us to claim it at that very moment—if only we would text back. We have to look further at that issue.
We have that advertising in the background all the time—we see it when we are on the tube, on the bus, on the high street and, increasingly, on websites and the internet, if not on our own phones. The significance is that it seems to normalise the issue—as if it is perfectly normal for people to take out all these loans and as if there is nothing to be concerned about with them. As I say, it normalises that behaviour.
We heard the Minister talk about the affordability and cost of credit, and we heard the hon. Member for East Hampshire (Damian Hinds) address some of the concerns raised about the dangers of interest caps. He described them as a blunt instrument, and he spoke about how a market for new products can emerge. The issues that the hon. Gentleman raised could be explored further in Committee. His points about the role of the mainstream banks were important, too. He referred to the charging regime and to the need for the so-called jam jar accounts. When some people cannot access or have difficulty accessing a basic bank account, it makes it extremely difficult for them to consider saving. He highlighted the importance of financial education and the credit unions to encourage saving, but the harsh reality is that it is simply not possible for many people on low pay to have the financial resilience to save. If a child needs a pair of shoes or a school trip comes up, or something unexpectedly goes wrong in the home, they might have to use the little savings they have, making it extremely difficult for them to get back on track. The credit union movement has a great opportunity to develop new products.
My hon. Friend the Member for Sheffield Central spoke clearly about debt collection and the problems that can arise with the continuous payment authority and customers. Sometimes amounts have been withdrawn without due notice given, which can lead to a very difficult set of circumstances, perhaps leading to other bills going unpaid.
The Bill as drafted would ensure that lenders had to signpost customers to free and impartial advice when they were turned down for a loan or when they were having difficulties with payments or defaults or if a continuous payment authority failed. That is important. The Bill would ensure, too, that the FCA would be able to determine the enforcement powers to be used for breaches of the legislation. Again, I view that as an important issue. I heard the Minister talk about the need to have everyone together and to have the code of conduct encapsulated in the provisions. It was almost as if the bad companies or those that would not adhere to the rules would somehow fall off the end of the world. Unfortunately, that is not necessarily the case, and enforcement is particularly important.
I said at the outset that I did not want to take a huge amount of time, but I wanted to indicate support for the Bill. My hon. Friend the Member for Sheffield Central and the Members of all parties who have worked with him have introduced an important Bill that should be scrutinised in more detail. There is no doubt that it could be improved through debate and discussion in Committee, with the comments of all the external agencies taken on board. I am disappointed that the Minister has not seen fit to support it, and it would be disappointing if it were talked out or the House did not support Second Reading. I urge Members to give my hon. Friend and those who have sponsored the Bill their support by ensuring that it proceeds to the next stage.
Jacob Rees-Mogg
The obvious answer to that is that there is no better credit-rated borrower than the Conservative party, the oldest party in history.
Mr Jones
Given the mess that the Chancellor is making of the economy, I am not sure I agree with the hon. Gentleman. The point is that the Conservative party can accept a cheap loan from a person involved in payday lending, at the same time as many of our constituents and ordinary hard-working families are being charged 74% interest. It goes further. Adrian Beecroft is a major stakeholder in Wonga which, as has been mentioned, charges up to 4,000% interest. He wants us to deregulate more—zero-hours contracts, the minimum wage and all the other things that he wants put forward in a deregulation Bill—but that will cause more of the problem. I am not surprised that he is in favour of it, because it will lead more people to payday loans at exorbitant rates from the likes of Wonga. I am a bit baffled by the Government’s approach to the Bill. It would be sensible to send it to Committee, debate it and if they want to amend it, they can bring forward proposals.
The heart of my point is how policy is influenced. The Prime Minister said this week that nobody buys Conservative party policy. We have heard very good contributions from Conservative Members who are clearly in touch with what is happening on the ground. However, while the Conservative party chairman, the Minister without Portfolio, the right hon. Member for Welwyn Hatfield (Grant Shapps) has described payday lenders as “obscene”, he is not afraid to accept their money.
Representatives from Wonga attended an event at the Conservative party conference that was described as a “speed dating event”, at which the Economic Secretary to the Treasury, the hon. Member for Bromsgrove (Sajid Javid), the Exchequer Secretary to the Treasury, the hon. Member for South West Hertfordshire (Mr Gauke) and the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon) spent 20 minutes at each table. The idea of speed dating two of them might not seem too bad, but the idea of speed dating the right hon. Member for Sevenoaks is taking things too far.
Jacob Rees-Mogg (North East Somerset) (Con)
I begin by referring hon. Members to my declaration in the Register of Members’ Financial Interests—not, I am glad to say, because I am a payday lender, but because I am regulated by the Financial Conduct Authority and am therefore involved in something that is relevant in the broadest sense.
It is always a great pleasure to follow the hon. Member for North Durham (Mr Jones), who is one of the most gripping speakers in this House. I am glad that he always speaks at sufficient length that his thoughts can be developed, which is invariably helpful to the deliberation on Bills. I was glad, too, that we agreed on the one point about Parliament regulating things rather than handing them out to random bodies. There is, however, one thing on which we disagree—his conclusion. I am going to say quite straightforwardly that I oppose this Bill. I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on introducing it, but I do not think it is the right answer to the problem. There are different answers to it, some of which I shall try to cover.
Let me start, however, by placing the problem in its historical context. The issue of usury, as the hon. Member for Foyle (Mark Durkan) rightly called it, is one that goes back to the most ancient times. The Hittites, the Egyptians and the Phoenicians were all lending each other food, substances, bits and pieces and getting them back. It is always a pleasure to mention the Phoenicians because it is believed that Joseph of Arimathea brought Jesus himself to Somerset on a Phoenician trading vessel. It was quite near Bristol, so we never know whether our lord might have gone there, too. This is the ancient history of usury: it is almost as old a profession as the oldest profession; it is part of human nature to lend things and have them returned at interest.
Usury is an issue that has troubled theologians over the years. The Old Testament includes particularly strong statements against it. I shall quote only one, the first one from Exodus 22:25:
“If thou lend money to any of My people, even to the poor with thee, thou shalt not be to him as a creditor; neither shall ye lay upon him interest.”
Even in the Book of Exodus, limits are being set on the amount that may be charged on the repayment that is to come.
Barbara Keeley
Is the hon. Gentleman going to move on to the example of Jesus throwing the moneylenders out of the temple of Jerusalem?
Jacob Rees-Mogg
Perhaps the hon. Lady refers to:
“You have made my Father’s house a den of thieves”.
I was not going to quote that because I thought it was so well known that it would be unnecessary to trouble the House with it. Interestingly, however, the money changers in the temple were changing ordinary Roman coinage into the special coinage used in the temple for buying sacrifices and so forth, and making a very healthy return on that. I am not quite sure that it is the same as usury, which is another reason why I was not going to mention that precise example. However, it is interesting that these issues have come up over the years.
The councils of the Church have considered the matter. At the council of Nicaea, the Church council that set out the Creed also decided that the clergy may not lend money at interest, and that interest may not be charged above a rate of 1% a month. The same issues were being discussed then—the rate of interest being charged and who may be involved in the process. The rather splendid Pope Sixtus V—I rather like somebody called Sixtus V; there seems to be some incongruity in it—said that charging interest was
“detestable to God and man, damned by the sacred canons and contrary to Christian charity.”
We see that these issues have been problematic for not just hundreds but thousands of years. They have been debated by theologians and looked at by economists.
The fundamental point is that there are people who have money to lend and people who want to borrow, and bringing the two together, when done in a suitable way, is beneficial to both sides. It makes it possible for people to spread payments, make investments and order their lives in a way that is convenient to them, and at the same time it makes a profit for the person on the other side of the transaction, who has excess capital to lend out. However, with that come difficulties and problems that Governments have sought to solve over generations.
At this point, I think it is relevant to quote the introduction to Henry VIII’s Act against usury, which shows the context of the problem. It states:
“Where before this Time divers and sundry Acts, Statutes and Laws have been ordained, had and made within this Realm, for the avoiding and Punishment of Usury, being a Thing unlawful, and of other corrupt Bargains Shifts and Chevisances, which Acts Statutes and Laws been so obscure and dark in Sentences, Words and Terms, and upon the same so many Doubts Ambiguities and Questions have risen and grown, and the same Acts Statutes and Laws been of so little Force or Effect, that by reason thereof little or no Punishment hath ensued to the Offenders of the same, but rather hath encouraged them to use the same.”
That, I fear, is why, in the end, I am not going to support the Bill. What happens is that Parliament legislates to rectify a problem but finds that what it legislates does not actually do that. Henry VIII’s Act was repealed within six years. It was against usury and also set a maximum rate on mortgages of 10% per annum. However, it did not work, because there are always people needing to borrow money and people willing to lend it to them. The question is how that is done, at what stage in the process and who is involved.
Having a source of borrowing within a regulated business system is preferable to loan sharks, who have been mentioned. We hear about “legal loan sharks”, and they may become illegal in some of their practices, but as far as I am aware Wonga, however bad a company it is, does not send people round with baseball bats. There seems to be a fundamental problem in legislating in a way that will push people in difficulties in that direction.
Mr Kevan Jones
I agree with the hon. Gentleman, but in many cases such companies use financial baseball bats on people.
Jacob Rees-Mogg
But the difficulty is that the loan shark uses both financial and physical baseball bats. That is not to say that the behaviour of Wonga is good, and I will come on to that. However, there are already measures available for a crackdown, to use the word we heard earlier, on the operations of such companies. I accept that there are problems with the way in which such lenders operate. I oppose the Bill not because I do not think there is a problem but because there are already measures that can be taken but are not being taken. Another statute is not the answer to the problem.
That leads me on to the FCA and the normal laws. If I may, I will cite the case of a constituent who came to me not because he had borrowed money from Wonga but because it came after him saying that he had. Somebody had used his name, had borrowed I think about £300, and had got it deposited in a criminal bank account—a bank account not belonging to my constituent. Wonga then came after him and said, “You owe us this money. Please may we have it back?” He is a wealthy man, so he would have had no difficulty paying this money if he felt like it, but he was also not the sort of person who was going to be fiddled around with and pay money that he did not owe. So he said to Wonga, “I do not owe it. I never took out that loan. That is not my bank account.” Wonga wrote back saying, “That’s absolutely fine. We’ll write it off.” He said, “No, that is not absolutely fine, thank you very much. That is criminal activity and I should like it reported to the police.” He reported it to the police, but he was not the sufferer of the crime. It did not affect him. He was not short of £300; merely his name had been used. The police therefore would not do anything on his account and Wonga refused to report it to the police. Therefore it was allowing a crime to be committed and in effect rolling up the cost of that into the interest rate it charged to the people who borrow from it—in a payday loan at a very high rate, as has been mentioned—and taking that as a cost of doing business.
I have a serious gripe with that on two counts, which I know very well from my own business life in financial services. The first is that there is a basic principle of know your client. If somebody comes to my business and wants to invest with us, we have to know that client. We have to understand what their objectives are, what their wealth is, what their situation is, what type of investment is suitable for them. We have also to know who they are—who they really are, that they genuinely are who they claim to be. The know your client rule is at the absolute heart of financial regulation in this country, but for some reason Wonga and the payday lenders can completely ignore it.
Jacob Rees-Mogg
The hon. Gentleman makes an interesting point, but knowing your client is not knowing a group of clients or a class of clients; it is knowing your client as an individual—as a person. That has been in the rule book of the FSA before and of the FCA now, and of the Investment Management Regulatory Organisation before them. It is a fundamental rule of financial services that we should know the counter-party with whom we are dealing and we should not deal with that counter-party if we do not, because we have a regulatory obligation to ensure the product we are offering is suitable to them. This seems to me to be a matter not of legislation, therefore, but merely of the FCA covering the bodies that are making the payday loans through its existing regulations, which would need very little change. That is a very straightforward means of putting this anomaly right.
Philip Davies
I am, as ever, very interested in what my hon. Friend is saying, but to what extent should payday loan companies get to know their clients? Is he simply asking that they get evidence of people’s bank statements or pay slips, or does he envisaging something more onerous?
Jacob Rees-Mogg
I suggest that the know your client obligation should be as strong on payday lenders as on somebody who was receiving an investment of a similar amount—that they should have an obligation upon them to know who their client is and to understand whether what they are offering is suitable. It would be as if someone went to Hargreaves Lansdown to get investment advice; they should know the customer as well as Hargreaves Lansdown would.
The second count is to do with an absolutely standard part of all financial service regulation: money laundering. It is drummed into anybody who works in the City that money laundering is one of the most dangerous things they can be involved with, and that anything to do with money laundering—any passive participation in money laundering—is a very serious offence subject to high penalties. The basic rule for an investment firm is, “If you hear about money laundering or have the vaguest suspicion of money laundering, you must inform the senior person—the money laundering officer—in your business, who will then decide whether to report that to the police.” The payday lenders clearly have no obligation to follow the money laundering laws that are already on the statute book, however. We do not need more laws; we need existing laws to be used.
Why do I think that? Let me go back to the example of my constituent and the £300. If the lender were paying it into a bank account of which they had no real evidence—no proper knowledge—that was a golden opportunity for money laundering. If someone can just ring up and say, “I would like to borrow a few hundred pounds,” and it is instantly put into an account in the name of someone who is not necessarily the person who has rung up, and is then paid back with a cash deposit, that is the most fantastic way of money laundering. Not only that, but the price paid of a month’s interest is a modest amount to pay to wash the money through the system. So this aspect of payday lenders’ operations would allow money laundering to take place—I have no evidence on whether or not it is taking place—in a very easy and straightforward way.
Philip Davies
Again, I bow to my hon. Friend’s expertise in this sector that I do not have. Do the money laundering regulations relate to moneys above a certain amount? Is that why payday lenders, which are generally lending very small amounts, do not appear, as he says, to be covered by that legislation and regulation?
Jacob Rees-Mogg
My hon. Friend is right; there are aspects of the money laundering regulations that set thresholds. For example, someone can bring only £10,000 into the country in cash—such a rule applies to many countries around the world in their equivalent currencies—and certain sums have to be reported, if they are cash transactions, by banks and so on. One part of the rules also deals with aggregations. Using a succession of small transactions is one way in which money launderers try to launder money, because the rules on higher sums have become relatively effective. Before legislating we should always want to look carefully at whether regulations that are already available could improve the system. The use of the two I have mentioned, relating to knowing one’s client and money laundering, would put a strong burden on the payday loan companies to ensure that they were lending to people they at least knew really existed and about whose financial circumstances they knew something. They would, thus, be able to lend to people who had a better chance of paying back.
The issue of people having a better chance of paying a loan back is important, because payday lenders have a cavalier approach to how they lend and so they build into their interest rate a high level of default, which means that people who can pay back, even though they may not be the greatest debtors, pay a much higher interest rate than would otherwise be necessary for them. If the business of the payday lenders was more tightly regulated so that they knew their underlying client and if the level of bad debt was brought down, the rate of interest would come down and the problem would be reduced in that natural and evolutionary way, rather than by trying to set caps and controls.
I have great difficulties with caps on interest rates, for the straightforward reason that no business is going to make a small loan if the interest rate is capped, because the administration of that loan will simply be too expensive to make it worth while. A £100 loan is likely to involve £5 to £10 of administration, whether that loan lasts for a day, a week or a month. So the rate for a week is extraordinarily high because it is being compounded over the course of a year. Setting caps is therefore not the right way to proceed, because it takes away the ability to borrow from the people who are most in need of these smaller sums at the bottom end of the scale.
The truth is that the bigger the borrower someone is, the better the interest rate they are likely to get. The hon. Member for North Durham (Mr Jones) talked about the Conservative party borrowing at 3.5%—of course it borrows at that rate. People who are borrowing millions of pounds pay low rates of interest, because usually there is some collateral against the loan, they are more likely to have a track record on lending and the interest rate covers the administrative cost. Where someone is paying 3.5% on a £5 million loan, the administrative costs are comparatively negligible. On a £100 loan repayable within a week, the 3.5% is so negligible that it would not begin to cover the administrative costs, and so what does the holder of capital do? They do not make the loan to the individual who needs it to get through that weekend. We must be careful about what we seek to regulate. If we seek to regulate one aspect of the system, we may well find that the unintended consequence is that the people who are most in need of this source of borrowing are cut out of the market altogether. In that case, they have no alternative but to go to the loan shark.
Mark Durkan
Does the hon. Gentleman not recognise that what he has just mentioned is already in statute among the things that the regulator would have to consider in relation to any of its other powers or options?
Jacob Rees-Mogg
The Bill is calling on the regulator to exercise those powers and I know that there was a vote in this Parliament to encourage the regulator to investigate the issue. That takes me back to my point and that of the hon. Member for North Durham: Parliament ought to decide these matters. We cannot simply say that this is too difficult for us to do, with all the resources we have and as the representatives of the British people, and that we will therefore hand it over to these grand panjandrums. Parliament’s job is to set the laws, not to delegate the powers to set the laws to unaccountable and unelected bodies. We have to stand at the next election saying, “These are the laws that we have passed,” not, “Well, we think this is frightfully difficult so we have decided on a quiet Friday that we will not do it ourselves but will past it on to the FCA.” That seems to me to be not only an abandonment of our duty but most unsatisfactory from the electorate’s point of view.
The electorate cannot hold the FCA to account. I do not even know the name of the chairman of the FCA, which is a lacuna in my knowledge that I probably ought to put right speedily. He is probably a very great man, but he is not accountable to the people of North-East Somerset. That is unfair on my constituents. There ought to be accountability on these crucial decisions that will affect their lives. There is no question about the fact that payday lending is an important part of the lives of people who are involved in it, and a very difficult one.
Mark Durkan
The hon. Gentleman must forgive me, but I think I recall him saying in a previous debate on possible financial regulation that Parliament should just leave things to the Governor of the Bank of England’s eyebrow, the way things had always been done.
Jacob Rees-Mogg
The great thing about the Governor of the Bank of England’s eyebrow is that it is not a matter of statute. We have not put it in statute—indeed, I cannot think how that the statute would be phrased—that the Queen’s most Excellent Majesty, her Lords temporal and spiritual and her House of Commons have decided that the Governor of the Bank of England’s eyebrow should have legal force. It is not an accountability issue. I must confess that such legislation was rather better drafted under Henry VIII than nowadays. The language used in the section I read out has the greatest attractiveness and beauty, whereas ours is rather more mundane, but even in the 16th century—before the Bank of England was even founded—the Governor’s supercilious qualities could not have been brought into statute law.
Let me move on to one of the issues raised by my hon. Friend the Member for East Hampshire (Damian Hinds), who made an absolutely fabulous speech and covered the issues with the greatest intellectual rigour. He got into the question of supply creating its own demand and demand creating its own supply. There is an important quality about demand creating its own supply and that is that it tends to reduce prices. If we regulate, we find that we interrupt the natural creation of the supply that comes through. Let us look at it this way: if more payday lenders come to the market, they provide excess capital that is available. They want to lend it out and they have it on their books. They then have to advertise and build up the market. They produce the supply available, but others are doing the same. There is then an excess supply in the market and the demand will fill it up, but only if the price falls. If we regulate in such a way as to reduce the supply that is coming on board so that that excess of credit is not made available in the market, the price will increase as there will be fewer people participating in the market.
Mr Robin Walker
Was my hon. Friend as surprised as I was, given his point about the availability of supply potentially reducing costs, to hear the Minister celebrating from the Front Bench the fact that people are exiting the market? Would he not agree that we ought to be encouraging people to take part in the market in a more responsible manner rather than driving people out of it?
Jacob Rees-Mogg
I am in agreement with that. I think we have to be careful, therefore, about introducing new regulation, because new regulation has a tendency to drive people out of the market, or, worse still, favour the largest players, who find it easiest to deal with the regulation, and will then create an oligopoly or ultimately a monopoly, which of course produces the highest pricing possible. I would very much not like us to legislate in such a way that it is hard for new entrants to come in, that existing participants are able to consolidate their positions, and that one or two of them are able to push their prices up even higher. That would be deeply undesirable and would increase the amount of abuse.
The concentration of power in a very small number of banks has reduced the competitiveness of the banking system in this country. If we had a more competitive banking system, we might find that the banks were more interested in making lower-level loans, but because they only need to concentrate on the biggest business, which is the easiest—the least risky—the major banks are not in this area. They leave it to the payday loan companies, which are less well organised; they are organised in a more aggressive way, and a relatively unattractive way compared with the major banks. They are dealing with people who have a lesser ability to protect themselves against the payday lending companies, and they are not so much a part of the full regulated system in the way that the banks are. My hon. Friend is spot-on to say that we should not make it our aim to be able to boast about how many payday lenders we are forcing out of business, because we want an active and competitive sector rather than just having one or two players left in the end.
One aspect of the Bill that has been much praised—including by my hon. Friend, in a speech with which I otherwise agreed a great deal—is the power to enable high-cost credit providers to levy and provide a fund. That is exactly the sort of thing that Parliament should not allow. Moreover, it is in contravention of Magna Carta to allow such a power to be given to third parties. The power to levy fines and taxation belongs, in this country, under Magna Carta, only to courts, and that includes the High Court of Parliament.
Mr Walker
I was very interested when my hon. Friend mentioned some forms of regulation of the investment sector and the banks, and argued in favour of the extension of such regulation to the payday loans sector. Does he accept that at the moment, banks and credit unions are paying towards the cost of financial advice, but payday lenders are not? Does he not find that an extraordinary situation—admittedly, one that we inherited from the previous Government, and one that we should try to rectify?
Jacob Rees-Mogg
I completely agree with my hon. Friend that it is an anomaly, but not all anomalies are corrected by adding people in to the anomaly. It is much simpler to abolish the anomaly and say that the right to levy taxation is a fundamental right of Parliament. I quoted specifically from Magna Carta, which refers to a court, and we are the High Court of Parliament. It is important to remember that fines should only come through a proper judicial process or through the will of Parliament extracting fees. As soon as we delegate that to other bodies, over which there is no democratic control, we give up something that is fundamental to this House and what it is for. The consent to taxation is what this House has done since 1265. Perhaps the last Labour Government passed it over in a fit of absent-mindedness; they were not known for their love of the history of the constitution and their strictest adherence to it.
Philip Davies
Would a solution to this rare disagreement between my two hon. Friends be for payday loan companies to volunteer a certain amount of money to help with this issue, in the same way as bookmakers voluntarily give money to charities to help with problem gambling?
Jacob Rees-Mogg
I am grateful for that suggestion; I think it is a very useful one. I would be very happy to see a levy brought in under the Finance Bill. I have no objection to a levy being placed on these people; it is just who places it. It needs to be placed by Parliament because that is a hard, constitutional right and power, not by an independent regulator.
Mark Durkan
Would not the answer then be simply to say that any levy proposed by the regulator would be subject to a resolution of Parliament?
Jacob Rees-Mogg
The hon. Gentleman has found a brilliant middle way. I do not usually like third ways, because one is going down the middle of the road and is most likely to get run over, but on this occasion I am in cross-party agreement with him.
To have the matter come before Parliament in such a way that Parliament can say no is infinitely preferable. I would also like it to be back-dated to cover the other levies. This House ought never to give up its powers accidentally because, in a sort of fit of absent-mindedness, we have passed the ability to tax to other independent, or nominally independent, bodies. That would be an error.
I want to indicate firmly that I think this Bill is very good in its intention but not in its practice. That is true of a lot of Bills on Fridays, and that is why the Government so often oppose them. I absolutely accept that there is a problem and that payday loans are an unattractive part of the capitalist system, but this House must always be careful that the solution is not worse than the problem.
As I said, the problem, in essence, is one that has existed from time immemorial. It is not a new problem that we have suddenly come up against, and unfortunately it is not one to which there has ever been a neat and easy solution. Caps have been tried again and again. A cap was the idea of the Council of Nicaea in the 320s AD, and it was repeated under Henry VIII in 1545. Those caps did not work and there is no reason to suppose that new caps will work. Why? Because people need to borrow the money when they need to borrow it, and therefore they will go out and find it one way or another. The more they are pushed into an unregulated and almost criminal arena, the worse it will be for them. It is therefore very important that this House does not rush to do something because it seems like a good idea when in reality it will not solve the problem and risks making it worse.
This House ought never to legislate when solutions already exist on the statute book. We see this time and again. In both Division Lobbies, the Acts passed, going back to the last war, are listed in volumes of ever-increasing thickness. The problem is that these volumes have laws going into them that are reprinted, re-enacted and re-passed because nobody bothered to look back to see whether they were already on the statute book and whether there might be a better answer already there just waiting to be implemented if only people had the gumption to get on and do it.