Consumer Credit Bill

I thank the Minister for the kind and courteous words with which he opened the debate and, in turn, welcome the Secretary of State to his new post. We had contact when he was Minister for Employment Relations, Industry and the Regions and I had tremendous admiration for the way in which he carried out that role. I look forward to working closely with all the Department of Trade and Industry team in my new capacity. The Conservative party welcomes the reintroduction of this important and overdue Bill to update our consumer credit legislation. Only one or two changes have been made to the Bill introduced in the last Parliament and the measure has broad support on both sides of the House, as well as from key consumer organisations and the credit industry itself. That is a strong working basis on which to take the Bill forward. I hope that the Minister enjoys that while he can because it is not often that the Government manage to maintain the confidence of even their own Back Benchers, let alone forge a broad consensus across the House. The need for the Bill is clear. Current legislation governing the consumer credit industry is now seriously out of date and, as such, fails to provide consumers with the protection that they need in a rapidly expanding and increasingly diverse and confusing credit market. We have already heard that confusion can be caused when people compare rates of interest calculated on different bases. It is 31 years since the last consumer credit legislation was passed. In that time the credit landscape has changed out of all recognition, partly as a result of changing lifestyles and attitudes to debt, and certainly because of the liberalisation of financial markets, which has allowed a highly dynamic and sophisticated industry to develop. As the Minister told us, only one type of credit card was available in 1971, but today there are more than 1,300. Thirty years ago, £32 million was owed on credit cards, but today the figure is almost £50 billion. Although that expansion has unquestionably increased competition, there has been a growth in some of the most unacceptable elements of the credit industry. As Members of Parliament, we have seen in our surgeries the consequences of irresponsible—or worse, rogue—lenders and extortionate credit agreements. We have seen such consequences destroying people’s livelihoods, families and mental heath. In the worst cases people have tragically been driven to suicide because they have been unable to cope with the huge debts that they have built up. Such people include Stephen Lewis, who was highlighted in today’s Daily Mail. He ran up debts of £70,000 on 19 different credit cards, despite earning just £22,000 a year. When he could no longer meet the repayments, he tragically took his own life, leaving a wife and two young children. I pay tremendous tribute to the work of citizens advice bureaux and other debt advice organisations that help many individuals and families to deal with financial difficulties. Without those bodies, many more people would suffer the same sort of problems, which explains why we need the Bill to crack down on loan sharks, whose activities are often the cause of such difficulties. Those people often deliberately set out to deceive consumers.