Consumer Credit Bill

As we have heard this afternoon, it is an absolute tragedy that in modern-day society we continue to hear stories of people taking their own lives because of their debt problems. It is therefore warmly to be welcomed that we have this Bill back with us today. I suspect that other hon. Members who were here during the debate on the previous Bill, which received broad support across the House, will be equally relieved that it has returned after it fell on Dissolution. As this Bill is almost identical, I hope that there will be a reasonable degree of unanimity, although I already sense that there are still slight disagreements on some aspects of it. No one in the Chamber can fail to remember the Meadows case in Liverpool; in fact, the Minister referred to it earlier, keeping in mind that an appeal will be held on Monday. What was the real problem in that case? Was it the fact that an original debt of £5,000 rose to £385,000, or the fact that it took all of 14 years to go through the whole court process? Whatever is the case, there is no doubt that the introduction of the compulsory alternative dispute resolution scheme will improve consumer rights and offer greater protection. For too long, consumers have been exposed to extortionate rates of interest. In general, the vast majority of people who find themselves in a financial plight have more than one debt. Only a couple of weeks ago, I had the unfortunate experience of meeting a constituent who was struggling with debt that had arisen from a credit card. She was a woman in her early 50s trying to cope with two or three different financial problems at the same time, one of them being a mortgage repayment. She is tied into a mortgage endowment that will, she told me, terminate in four or five years’ time, but there appears to be a significant shortfall in its maturity figure. She knows full well that she will have to cope with that fairly major problem in four or five years’ time. However, the credit card debt was starting to get out of control. For several months, she had been making payments faithfully and had never defaulted, but only 20 per cent. of what she paid was diminishing the balance that she owed. Some 80 per cent. was therefore being paid back in interest. Under normal circumstances, people would think that credit cards were fairly sound and reasonable but we have heard about negative experiences today. The lady was reaching breaking point and she said to me, ““If I continue in this vein, I will be in my mid 80s before I get this repaid.”” She was struggling. Thankfully, I was able to encourage her to go to the bank and speak to people about the debt, and the good news is that she now sees some light at the end of the tunnel. We are constantly advised to save for our retirement and prepare for our later years but consumers never appear to be advised about the concept of saving. Perhaps I came from a different stable several years ago. Today’s consumer is vastly different from those of 20 or 30 years ago. There have always been people who could afford anything they wanted. There were also those who saved to buy a specific item or endeavoured to make a purchase in a short-term, interest-free period. However, nowadays, we never hear of people saving to purchase products for the home or anything that might be deemed a luxury item. Indeed, what is a luxury item today? We live in a different society and people no longer save. My right hon. Friend the Member for Leeds, West (John Battle) said that people were ashamed of debt. Although I believe that that is true of some people, it worries me when we hear of others who almost boast about it. There has been a change in attitude in 20 or 30 years. Debt used to be a stigma for most people. Nowadays, that applies to fewer people. That is apparent even in game shows. ““Who Wants to Be a Millionaire?”” captures my imagination from time to time. The bold Chris Tarrant asks contestants, ““And how much would you like to win?”” to which people explain their reasons for how much they want to win. Often, one of the reasons for wanting to win a specific amount is to pay off debt, including credit card debt. I therefore stress to my right hon. Friend the Member for Leeds, West that some people almost boast about it. We live in a different society nowadays.