Consumer Credit

Lord Kennedy of Southwark Excerpts

Thursday 3rd February 2011 Lords Chamber

Asked By

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what assessment they have made of the interest charged by loan and credit companies.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, the Government are looking at a number of additional protections for consumers in the credit market through the consumer credit and personal insolvency review, which is now going on. The review is headed up by the Department for Business, Innovation and Skills, which includes consumer affairs, and the Treasury. We are currently considering the evidence submitted in support of the review.

[Lord Kennedy of Southwark]

I thank the Minister for her reply. Does she agree that it is just wrong for some of the poorest and most vulnerable people in our society to pay interest rates of up to 3,000 per cent for credit? Does she further agree that the Government need to actively support the growth of the credit union sector and to support the link-up with the Post Office, and thereby give people access to an affordable, wide range of credit to meet their needs in their high street?

[Baroness Wilcox]

Yes, my Lords, of course I agree. The Government are aware of concerns about the high-cost credit market and suggestions that there should be a cap on high-cost credit products. We have been here before. There have been three reviews, from when the Opposition were in government and when we were in government before—we have reviewed this over and over again. The first time was 15 years ago, when I chaired the National Consumer Council. We are worried that people would go to illegal loan sharks to borrow money if there were capping. On the second part of the noble Lord’s question, we are doing everything we can to reinforce the link-up between the Post Office and the credit unions. It is a marvellous system and I hope to see it flourish.