Consumer Credit Bill

That has always been the case; my allies are always on the Labour Benches. What we have heard during the debate has been tremendous support for the Bill’s principles but, nevertheless, a great deal of concern about some of the details. Virtually every hon. Member who has spoken called for more details, starting with the right hon. Member for Leeds, West (John Battle), who made a remarkable speech and to whom tribute was paid by hon. Members on both sides of the House. What is clear is that we come to the Bill from different perspectives. We are looking for different aspects of the detail to be provided because we may be ultimately looking for different things to emerge. The Minister therefore owes it to us to provide us with that detail as the Bill goes for consideration in Committee, so that we can clearly see what is in his mind. I simply do not believe that the Government are dealing with a blank piece of paper on this issue. I know the way that the civil service works too well to think that the Government have not got those things worked out. If we start to come up with thoughts in Committee, they have got reams of paperwork already prepared, which they will be able to use to explain why certain bits should, or should not, be included. We want the Minister to provide more detail in Committee, so that we can fully understand the Bill. There has been a great deal of talk, too, about the need for transparency and to help consumers understand what they are signing up to. My hon. Friend the Member for Tewkesbury (Mr. Robertson) spoke about that with a great deal of eloquence. It is going beyond the call of duty that, having led for the Opposition in the debates on the previous Bill, he has taken part again today. Perhaps he would like to serve again on the Standing Committee. He would be extraordinarily welcome. My hon. Friend also said that credit deals are often extremely complex and confusing. People think that they are signing up for one thing but end up getting something else. Any hon. Member who has tried to buy a car recently will realise that choosing the type of car, the engine size, the colour and the interior is only the easy part; it is when one comes to working out how to pay and all the ramifications of the huge range of options available that it gets truly confusing. What all hon. Members want on behalf of consumers is a system whereby they can really see what is proposed. I listened with great interest to what was said by my hon. Friend the Member for Wantage (Mr. Vaizey). I particularly agree with him about the need for personal financial education. We are letting young people leave school and education without an understanding of the deep and detailed financial issues that they will be required to deal with extremely soon after leaving. We owe it to them to give them that sort of education, and I hope that the Minister will talk to his colleagues at the Department for Education and Skills to ensure that they are aware of that. Concern has also been expressed about leaving such issues to the courts. Again, that issue was raised by the right hon. Member for Leeds, West and the hon. Member for West Bromwich, West (Mr. Bailey). I share their concern that many consumers are terrified of going to court, that their experience of court has probably been negative and that the idea of taking on a major financial institution is the sort of stuff that they believe happens in John Grisham novels, not something that ordinary people want to face in their ordinary lives. We need to take as much of the detail away from the courts as possible and put it in the Bill, so that the consumers and the credit institutions know what they are dealing with. My hon. Friend the Member for Rochford and Southend, East was very eloquent in talking about the dangers of leaving the courts to decide the details and in highlighting the need for caution in making the Bill retrospective. There has been much discussion about interest-rate caps by the right hon. Member for Leeds, West, and by the hon. Members for West Bromwich, West and for Carmarthen, East and Dinefwr (Adam Price). The hon. Member for North Norfolk (Norman Lamb), whom I was remiss in not welcoming to his brief at the beginning of the debate, was quite right that the worst cases where consumers have been let down occur when people have borrowed from multiple sources and no one has checked whether they can pay back the money. That is a bigger issue than the level of interest rate caps. I am convinced that introducing interest rate caps would not help those in greatest need. There is no doubt that those who lend to those people would start to withdraw and people would borrow from unscrupulous, illegal or unchecked lenders. The most vulnerable consumers would end up losing out. Caps would also threaten to close down whole sections of the credit industry—for example, pawnbrokers. Most of us would not think it unreasonable if somebody in need of cash took their television set to the pawnbrokers and left it there in return for £50. If they went back a month later and retrieved it for £60, that would for many people seem to be a good way of evening out their cash flow. It is actually an APR of more than 1,000 per cent., so if we start capping APRs at an arbitrary level, we will close down an extraordinarily important part of the credit industry. An undercurrent through the debate has been the general anxiety about the levels of debt in our society. That point was mentioned by the hon. Members for North Norfolk and for Hastings and Rye. The latter spoke eloquently about the survey by the Tomorrows Peoples Trust, an outstanding organisation with a good reputation on this issue and for training young people. He had interesting ideas on how the problem should be stopped and how we can stop people taking on debt that they simply cannot afford. This is not just an issue for people on the lowest incomes. Debt now affects people in all parts of the country and of all income levels, as my hon. Friends the Members for Tunbridge Wells and for Basingstoke made clear. It is particularly an issue in the south-east where the cost of housing is so high that people are forced to take on extra levels of borrowing and debt to meet their bills. That is particularly an issue for young people. The hon. Member for Carmarthen, East and Dinefwr spoke about how, week on week on average, people spend beyond their means—£20 a week, £1,000 a year. This is a massive problem and one of which we must be aware. The measures in the Bill enjoy our support, but we believe that it can be improved in Committee and that the Government need to be much bolder if they are going to tackle debt-ridden Britain. They need to wake up to the growing crisis of a country in ever-greater debt and the evidence that people are struggling more and more to keep up with their repayments, as shown in today’s press reports. Debt is growing by £1 million every four minutes; it has grown by £80 million in the course of this debate. Some £1.1 trillion of debt is a massive millstone round the necks of families across the country. As we have heard in the debate, that often ends in misery and sometimes tragedy. The Government need to start by putting their house in order. They are the biggest serial debtor of the lot, with the Chancellor the natural heir to Viv Nicholson, who won the pools and went on to spend, spend, spend until there was nothing left. Although the Chancellor can put up taxes, and he does, to cover his spending, the public do not have that option. In just eight years, debt in Britain has doubled and the Government need to be less complacent and more willing to recognise the extent of the threat. To continue, however, in the vein of constructive dialogue in which the debate has been carried out, I recognise that this is an important Bill. We support it. However, it can be improved, as every Member who has spoken has pointed out. We look forward to working with the Minister in Committee and hope that he will be willing to take changes on board. It may be another 31 years before we have the chance to review the legislation again so let us get it right now.