High Cost Credit Bill
Debate between Mark Durkan and Marcus Jones
Mark Durkan
Does my hon. Friend agree that some of these businesses are basically committing usury and that the arguments against the Bill are nothing more than “excusury”?
Mr Jones
It is an excuse not to do anything. Those who oppose the Bill, including the Government, have to recognise that this is a real issue, and not only in constituencies such as mine. The hon. Member for Worcester, which is very different from Durham, said that these companies have gone into different areas and are using these aggressive tactics. I looked last night at the list of Stockton payday lenders. Some of their websites are very attractive—bright advertising and so on; clearly that needs to be regulated.
Why can we not act in this country? I think it was my hon. Friend the Member for Glasgow North (Ann McKechin) who mentioned the highly regulated American system. The other system that seems to work is the Canadian one, which can cap interest at 7%, as opposed to the rate on similar loans in this country, which is 70% to 74%. If those countries can do that and ban, for example, roll-overs, why can we not do it here? It is about political will, and that goes back to the point I made earlier.
Why do the Government not want to do those things? They have clearly been lobbied extensively by the sector. Some may argue that they have a direct financial interest in raising money from the sector and accepting loans off the individuals involved. They will not introduce the regulation that would help people. If we are looking at this issue seriously, we need to ensure that the policy is not only reactive but morally right. Legislation should be introduced, but the Government are putting their vested interests ahead of those of many of my constituents.
Mark Durkan
I thank my hon. Friend for giving way again. Does he recall that when the Government were taking through the Financial Services (Banking Reform) Bill—which makes far more provision in respect of the FCA, the Prudential Regulation Authority and the new regulatory system—they made a point of saying that it rightly provided more indicators from Parliament for issues and options to be considered in relation to the FCA’s other functions, because the evidence was that that had been missing from the previous regulatory regime. Surely this Bill is simply colouring in the equivalent considerations in respect of this power for the FCA.