Banking Reform

Jonathan Edwards Excerpts

Thursday 17th June 2010 Commons Chamber

[Mr Hoban]

I am grateful for my hon. Friend’s question. It is important to ensure that businesses have confidence that where macro-prudential threats arise in future, action will be taken to resolve them. They did not have that confidence in the previous regime and I hope that they will have that confidence following the reforms that we have put forward today.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Economic growth in the past decade was driven largely by consumption. As a consequence, £1.4 trillion-worth of personal debt is circulating in the UK economy, which means that the human cost of the current recession will be particularly severe. Will the new Consumer Protection and Markets Authority make sure that lenders have to undertake affordability audits so that individuals and families incur only debts that they can service?

[Mr Hoban]

The hon. Gentleman is right to pick up on this issue. One of the big challenges is ensuring that consumers are properly equipped to understand their borrowing and saving needs, and the Consumer Financial Education Body has a key role to play in improving financial capability in order to help people to make the right decisions. Also, there is an obligation on industry to make sure that it provides consumers with the best advice possible to help them to make the right decisions.