MP's bid to tackle loan sharks must not be the last word: time for national inquiry into payday lending
12 July 2013
Unite, the country’s biggest union, said that the postponement of Paul Blomfield MP’s High Cost Credit Private Members’ Bill in the House of Commons must not be the last word on measures to tackle this growing and worrying industry.
The union said that a national inquiry into the conduct of the payday lending industry and its contribution to the nation's personal debt time bomb is now urgently needed. Unite's own survey of its members revealed that those using pay day lenders are borrowing around £326 per month to get by, the equivalent of one week's wages. The union dubbed the last week of the month `Wonga Week' to describe the phenomenon of working people borrowing to get by.
The Bill goes failed to progress today because of Tory blocking tactics and will now be deferred until December. Measures set out in the Bill would help tackle some of the worst excesses of the burgeoning payday lending industry, which has grown from being worth £100 million in 2004 to £4 billion today.
Steve Turner, Unite executive director of policy, said: "We congratulate Paul for putting this Bill before the Commons today. He has does the country a service by shining a light on a truly problematic industry. But the government and those MPs who colluded to stymie the bill ought to be ashamed of themselves.
“Make no mistake, this industry’s rapid growth is built on exploiting financial hardship, especially among the most vulnerable groups in society. The collapse in wage levels and the cost of living crisis is forcding people into the clutches of the sharks. Yet while the industry is tightly controlled in other countries it is allowed to run amok here. It is high time that the people in this country were defended from rip off rates in the way those in Canada and Australia are.
“People will be angry that some Tory MPs blocked a campaign that could make a real difference to their communities. And they will again be suspicious that the government's pally relationship with some in the industry make it very reluctant to stop these sharks.
“It is high time there was proper scrutiny of this industry. An urgent Treasury Select Committee inquiry is needed to look at what this industry is, why our banks are failing the hard up, how rip off rates force people further into debt and the impact these unscrupulous lenders are having in communities across the country.”
Some of the key areas the Bill would address include: reducing prime time advertising of payday loans; requirements for lenders to contribute towards debt advice; and a duty placed on the new Financial Conduct Association (FCA) to better use existing law to control bad lending and debt collection practices.
For further information call James Bevan on 07711 347 645
Notes to editors
Unite is Britain and Ireland’s largest trade union with 1.4 million members working across all sectors of the economy. The general secretary is Len McCluskey.
More information on Paul Blomfield MP’s High Cost Credit Private Members Bill can be found here: http://services.parliament.uk/bills/2013-14/highcostcredit.html