Consumer Credit and Debt Management

Richard Graham Excerpts

Thursday 3rd February 2011 Commons Chamber

[Richard Graham (Gloucester) (Con)]

Today we have gathered in all parts of the House as the champions of sensible consumer credit for the most vulnerable in our communities. It is interesting that so many of these champions are new Members of this House. Among our company, I pay tribute, as many others have done, to the hon. Member for Walthamstow (Stella Creasy) and to my hon. Friends the Members for North Swindon (Justin Tomlinson) and for East Hampshire (Damian Hinds) who have been leading the way in setting out our concerns about consumer credit.

The hon. Member for Erith and Thamesmead (Teresa Pearce) referred to snakes and ladders and concluded that the motion was all about increasing the ladders of opportunity for her constituents. In truth, it is about the other side of the equation: reducing the number of snakes, reducing the amount of credit that is made available through payday lending, and ultimately putting a squeeze on the loan sharks—the one species of fish which we might all agree we would not mind if the beastly EU fisheries legislation sorted out for ever.

The motion proposed by the hon. Member for Walthamstow calls on the Government to introduce caps on prices. Interestingly, when she introduced the motion, she called for the regulator to put these caps in place. All that is at stake in terms of whether we vote for the motion or for the amendment is the narrow issue of whether it is the place of the Government to impose caps on prices or whether it is the responsibility of the Government to encourage a regulator to do so. In that respect, it is relevant that the snappily named “son of OFT”—the consumer markets protection agency, if that is to be its final name—is the relevant body that should be putting caps on prices. The consultation is out there, and we should all be participating in it and encouraging the new agency to do so, as the motion and the amendment suggest.

The other side of the equation, which is all about the ladders of opportunity, comes back to the other issue dear to the hearts of many of those in the Chamber—how to provide sensible credit to vulnerable constituents. I declare an interest, as have many hon. Members, as a member of the Gloucester credit union. I pay tribute to the Government, specifically the Department for Work and Pensions, for funding a post to enable five small credit unions to form together into a Gloucestershire-wide credit union, which will be launched in March. It is through credit unions that we will make credit available to such constituents. I hope that it is part of the Minister’s plans—no doubt he will tell us more—for credit from credit unions to be available through the network of 11,500 post offices.

The final point I would like to make about the ladders of opportunity is on financial education. I pay tribute to my hon. Friend the Member for North Swindon on the new all-party parliamentary group on this matter. Although it is a less attractive game than bashing bankers, I urge all Members to work with the financial services institutions in their constituencies, many of which provide considerable free financial education.

[Mark Durkan]

The hon. Gentleman compared the motion and the amendment and suggested that the motion called on the Government to introduce caps. It actually calls on the Government to introduce regulatory powers that would allow the introduction of caps. The amendment calls on the regulators to consider introducing caps. Do the regulators currently have such powers? If they do not, the amendment is specious.

--- Later in debate ---

[Richard Graham]

I thank the hon. Gentleman for that contribution. The amendment encourages the Government to introduce

“measures to increase access to affordable credit”

and

“urges regulators to consider putting”

caps on prices. I believe that that is precisely the form of words that is appropriate. That is why I support the amendment. It recognises that 95% of the motion is right, but that it needs a significant but small fine tuning.