Derek has today expressed his disappointment as yet again the Government has rejected Labour's efforts to protect consumers from the problems caused by payday lending.
On Tuesday 22nd May, Derek voted to support a cross-party amendment to the Financial Services Bill which would have allowed the regulator to cap the cost of credit if a financial product was judged to cause 'consumer detriment'. Despite the backing of several Conservative MPs, the Government successfully whipped most of its MPs to reject the amendment.
The Government's rejection of this reform proposal came on the same day as new research was published which showed that 98%of MPs and 93% of the public believe there is a problem with payday lending; 6% of MPs and 65% of the public also support a cap on the total cost of credit.
"Residents of Halton are suffering in our current economic climate as rising living costs, wage freezes and unemployment hit their household incomes. I know from talking to them how they are turning to credit from these companies to make ends meet. They lend money at extortionate rates of interest that can cause a cycle of debt for many, with one in three payday loans being taken out to pay off other payday loans. This amendment to the Financial Services Bill would have sent a clear and unequivocal message to the industry that their worst excesses would no longer be tolerated. Despite saying they support action, too many Goverment MPs did not have the guts to stand up for the people they represent.
By voting against this proposal, this Government has shown just how out of touch it is with the rest of the country. The research is clear - across Britain everyone else overwhelmingly backs our proposals to take action to tackle the debts that payday lending can cause and to give UK consumers the same protection others round the world enjoy.
We will now take the fight for this proposal to the House of Lords as this isn't over - residents in Halton should know that whilst the Government may sit on its hands, we will continue to campaign for an end to legal loan sharking in Britain."