Society has changed a great deal in the last few decades. As a nation we are more accustomed than ever before, to taking on debt especially through credit cards or store cards. Indeed, a recent University of Brighton study found that average household debt in Hastings was as much as £8,000.
Most of us can manage our debts but for some the problem rapidly spirals out of control. Like all MPs I get letters from people who find that debt is ruining their lives. And financial problems often have a knock on effect, leading to mental illness and family breakdown.
Part of the pressure comes from the high interest rates that doorstep lenders and store cards charge. It’s ironic that a football star buying a Mercedes will only have to pay 6% interest on his loan, but a single mother wanting to buy Christmas presents for her children may find herself paying 40% or 50% interest.
That’s why I am pleased to say that the Government is looking to change the laws so that we can tackle irresponsible lending and unfair credit deals. It is not always possible to protect everyone from themselves, this is not a nanny state, but we do care for others in our society and we must ensure that people are not unfairly treated.
As I told the House of Commons, I want to see credit companies taking responsibility for working out whether a client is able to pay back a loan. They should not be able to recover a debt if they have not done so. There must also be a cap on unfair interest rates which impact more on poorer people who have a limited choice of credit.
Finally I’d like to put in a plug for our local Credit Union which does a fantastic job in providing credit at the rate of only 12% interest. It is a community organisation which works to help people on low incomes to save and to borrow, instead of providing profits for City ‘fat cats’! There are collection points all over town. To find out more, call 01424 202651.
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This page last updated: 22/06/2005