Affordable Credit for People on Low Incomes

Stephanie Peacock Excerpts

Wednesday 5th December 2018 Westminster Hall

[Frank Field (Birkenhead) (Ind)]

I beg to move,

That this House has considered the provision of affordable credit for people on low incomes.

It is a pleasure to serve under your chairmanship, Sir David, although I hope it will be not just a pleasant time, but a very productive one. We are anxious to leave plenty of time for the Minister to reply because we want, and hope, to make progress with the debate. I address him as an hon. Friend, because in this debate I am drawing information from Feeding Britain, a charity that he, I and other MPs from different parties set up. This debate on the provision of affordable credit for people on low incomes draws on the experiences of groups around the country that are part of the Feeding Britain network. I thank those involved in the network, whose information I draw upon, but particularly the parents and grandparents who have provided information for this debate.

As I gave him much of the information beforehand, the Minister knows that there is far too much to cite in this debate from people in the Feeding Britain network who want to have their say. I will instead focus on an everyday story of Provident. I do not know whether it worries about Salisbury, but Provident is putting out these leaflets in the Wirral, personally addressed, and on the front are pictures of a little girl and the words, “The look on her face”, “Decorating grandad” and “Visiting loved ones”, all playing on the feeling of exclusion that many poor people feel all the time, but especially at Christmas.

Behind those leaflets there is a carefully targeted business plan, because certainly Provident stepped up its activities with the beginnings of the roll-out of universal credit. Officers of Provident were knocking on doors with application forms in one hand and fistfuls of money in the other, asking whether people wanted to sign up or needed a loan, knowing that while we still have difficulties with universal credit today, we certainly had mega-difficulties when it was first rolled out in Birkenhead.

[Stephanie Peacock (Barnsley East) (Lab)]

I congratulate the right hon. Gentleman on securing this important debate. Particularly with people facing problems such as universal credit, does he share my concern that a growing number of people—I think it has gone up by 300,000 in the last year—rely on credit to pay for everyday essentials? That is hugely unsustainable, and we need to look at mixed alternatives.

[Frank Field]

Indeed; we will try to draw the Minister on that. Part of the leaflet concerns short-term loans, saying that the APR is 535.3%; I hope Members of Parliament know what APR—annual percentage rate—is. I will not press the question, but the Minister has one degree from Oxford and one from Cambridge, so I wonder, if we were looking at a £300 loan and had to pay it back within three months, what the loan would cost and what the rate of interest would be. I am not going to pause; I will give the answers. It is one of those very easy quiz games, but a horror quiz game, because if the repayment is over three months, Provident wants £429 back at an annual interest rate equivalent to 1,557.7%. That is just one example. Constituents borrowing £350 and paying it back over 12 months have to pay back £655.20.