Parry Mitchell on a historic day in the long campaign to control payday loans companies
Last Wednesday at Report stage of the Financial Services Bill, we scored a famous victory in our quest to control the activities of the payday lending companies. I was lucky in that the three co-signees to my amendment were people of great stature. Baroness (Elspeth) Howe and Baroness (Tanni) Grey-Thompson frequently address the subject of the vulnerable in our society and they did so again in the debate. The Bishop of Durham, the soon to be Archbishop of Canterbury, also lent his great stature to our cause.
Ministers made a total climb down, in that instead of opposing my amendment they supported it and went even further to say that they wanted to reintroduce it with tighter and stronger wording. With those assurances I withdrew my amendment.
The government has today been true to its word and the amendment they have written for Third Reading is totally acceptable to us. It is indeed stronger than my original wording and it addresses all the outstanding issues. As a result I will be adding my name to Treasury Minister, Lord Sassoon’s amendment when he brings it to the House tomorrow.
People ask me why it was that the government did such a volte-face? My answer is that they realised that they had no option. They had previously misread the mood in Parliament as well as the mood in the country. They then realised that they were on a hiding to nothing. The Opposition would have defeated them last Wednesday – Ministers knew it and decided to cut and run.
I also believe that when they focussed on the issue they saw the moral force of our argument. Their own benches were also getting restless.
But we were also lucky enough to also have the media with us on this issue. Every article I read in the press and every story I saw on television was supportive of our cause and against uncontrolled payday lending.
Legal loansharking, payday lending, short-term loan fees – call them what you will – need to be controlled. Interest rates of over 4,000% are simply unacceptable in a civilised society and as Bishop Justin Welby said so clearly: they are ‘usurious’. They prey on the vulnerable and provide temptations that those in financial trouble find hard to resist.
Finally, I just want to add this.
Some people question the relevance of the Lords, but when this House sees injustice it has the determination to take action – this was one such instance.
Tomorrow we will see the culmination of a long campaign to control the payday loan companies. The amendment that was defeated in the Commons will now be accepted in a better form by Peers. Government and Opposition will be as one in bringing into law a framework for the new Financial Conduct Authority, that will give it stronger powers to control this abuse.
It will be a very good day for us all.
Lord Parry Mitchell is a member of Labour’s frontbench team in the Lords
4th December 2012