Credit Cards: Cost Regulation
Debate between Paul Girvan and Stella Creasy(6 years, 9 months ago)
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Stella Creasy
I appreciate that the hon. Gentleman has a particular concern. I hope I can convince him that the regulation of credit cards that I am interested in is about their cost to the consumer in the first instance.
I do not think the reason we have such a personal debt crisis in this country is rocket science. There is simply too much month at the end of the money for too many people. We now know that economic insecurity is the new normal, with at least 70% of Britain’s working population defined as “chronically broke”. Some 32% of UK workers have less than £500 in savings, and 41% less than £1,000. Almost 30% are desperately concerned about their debt, because it is not just about everyday living costs; it is about the financial shock that might come because someone loses their job or their relationship breaks down. Too many people live on that edge now.
It is worrying that, unlike in previous years when insolvency rates have increased so much, unemployment rates are still dropping. That tells us that people are in full-time work, but are still unable to pay the basic costs of living, such as utility bills and rent. Combine that with inflation increasing at about 3% a year and stagnating wages, and it is not hard to see why personal debt is booming in this country.
Paul Girvan (South Antrim) (DUP)
On credit card debt, a lot of people are suckered in with introductory interest-free periods and their credit limit being increased, to a degree where they end up putting a noose around their neck. Ultimately they are unable to repay because of their lack of savings, as the hon. Lady has already identified, and as a consequence they end up paying at exorbitant interest rates once the interest-free period runs out.
Stella Creasy
The hon. Gentleman prefigures much of what I will say about who I believe are the new Wongas in our society.
It is not possible to make the argument that the millions of people on zero-hours contracts and in temporary work can manage their repayments and can be confident about the amount of money coming into their households. With millions of people now self-employed, and more people in England likely to be employed in the gig economy than working for the NHS in a few short years, it is clear that insecure, precarious work and precarious finances are the new norm for millions of people in our country.