Consumer Credit and Debt Management

Robert Buckland Excerpts

Thursday 3rd February 2011 Commons Chamber

[Justin Tomlinson (North Swindon) (Con)]

I thank the Backbench Business Committee for agreeing to the request from the hon. Member for Walthamstow (Stella Creasy) and me for this debate. There is true cross-party support for this—more than 40 Members from different political parties supported us—and we were delighted to secure this three-hour debate. I am pleased that so many want to speak, which shows a real desire to make a difference on this crucial issue.

Many hon. Members will set out compelling reasons for the importance of this issue from their individual casework. Organisations such as the citizens advice bureaux say that 60% of their work is dealing with financial difficulties. It is surely better to tackle the problem at the source, but all too often consumers are simply not equipped to make informed decisions. It is the high-cost lenders who take advantage.

[Mr Robert Buckland (South Swindon) (Con)]

My hon. Friend and I organised a debt awareness day in Swindon, where we found an alarming lack of knowledge, including people thinking that the APR was the be-all and end-all and not realising that the total package could be dramatically more expensive. The motion addresses that problem.

[Justin Tomlinson]

My hon. Friend is spot on, and all too often we find that consumers are simply not equipped to make informed decisions.

It is suggested that total cost caps are the solution, and I support the principle. Surely there is an unequivocal case for saying that for borrowing X amount, there should be an absolute limit on the sum to be paid back. We should protect consumers from the very worst.

The motion is 99% there, but the amendment expresses a slight hesitation. There is still a nervousness, because whatever we do will have consequences. When organisations such as Consumer Focus and MoneySavingExpert, which is run by Martin Lewis, say that we must be mindful of possible consequences, it is right and proper that we should take a measured and detailed look at the issue to ensure that the consequences are thought out. The evidence is inconclusive—