Consumer Credit and Debt Management

Debate between Robin Walker and Rachel Reeves

Thursday 3rd February 2011 Commons Chamber

[Mr Walker]

I am very grateful for that intervention as it gives me time to make the next part of my speech, which is on that very subject. I am certainly not calling for self-regulation in this area. I am calling for the regulators to look at this.

It is important to note that the Government have announced plans to create a new consumer protection and markets agency, whose focus will be squarely on protecting individuals and consumers. That will be a refreshing change from the vast and fragmented scope of the Financial Services Agency. Such an agency would be ideally placed to consider this matter and to work closely with consumers and the industry to find the best way to deliver a range of caps on prices, balancing the needs of access to credit with those of price. Without that regulator in place, I believe it would be a mistake to create new regulatory powers subjecting such an important matter to the change and disruption inevitably entailed in a handover of responsibilities: far better that we clearly indicate the will of this House that regulators must consider these matters and take them seriously.

I return to the fact that I support this motion. Like many other Back Benchers of all parties, I want to see action taken to cap the cost of credit. I am deeply concerned about the levels of interest charged for payday lending and want to do everything I can to protect my constituents from loan sharks.

[Rachel Reeves (Leeds West) (Lab)]

The constituent who came to see me at my surgery last week because she could not sleep at night because of the payday loans and the interest rates charged urged me to vote for today’s motion. She will see no benefit from urging the regulator to consider introducing caps. She will see benefit only from those caps being introduced.

[Mr Walker]

I am afraid I disagree. The caps have to be introduced in the right way. The best way for the Government to take action on this is to drive forward access to credit, improve financial education and encourage a genuinely competitive market in affordable credit. I support the suggestion that a range of caps should be given serious consideration but, in common with many other Back Benchers, oppose the creation of new regulatory powers at present. By accepting my amendment, the House can send a clear message of intent without sacrificing this worthy motion to complex arguments and ideological disputes on regulation. I believe that the amended motion would represent a clear expression of Back-Bench opinion from across the whole House, and I therefore commend it to the House.