Roger Godsiff MP vows to continue to support credit caps as Government scuppers opportunity to protect public from legal loan sharks.
The MP for Birmingham Hall Green today expressed his disappointment as yet again the Government rejected Labour attempts to protect consumers from the problems caused by payday lending.
In Westminster on Tuesday 22 May 2012, Roger Godsiff MP 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 support of several Conservative MPs, the Government whipped its MPs to reject the amendment.
The Government’s rejection of this reform 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. 66% of MPs and 65% of the public also support a cap on the total cost of credit.
Roger Godsiff said:
‘Residents of Birmingham are suffering in our current economic climate as the cost of living rises, 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 message to the industry that their worst excesses would no longer be tolerated.
Despite saying they support action, too many Government MPs didn’t 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 Birmingham 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.’
1. ROGER GODSIFF MP voted in favour of Amendment 40 to the Financial Services Bill. The outcome of this vote was 225 to 266 with over twenty Government MPs choosing to abstain on the matter or vote for it.
2. Amendment 40 stated: ‘The FCA [Financial Conduct Authority – the new regulator] may make rules or apply a sanction to authorised persons who offer credit on terms that the FCA judge to cause consumer detriment. This may include rules that determine a minimum total cost for consumers of a product and determine the minimum duration of a supply of a product or service to an individual