I have some difficultly with that argument, although I am sure that that will happen to some extent. But if extortionate lending exists, it surely does not really matter whether it is legal or illegal. Are we really saying, "Such people are going to be exploited anyway, so they might as well be exploited where we can see them"? Surely the point is to try to minimise any exploitative or extortionate lending. By extension, one could advance the same argument in respect of the unfairness test, which, if it works, prevents the instances of very short-term loans with APRs of 1000 per cent. that we have witnessed in the sub-optimum market. We should respond by trying to introduce positive measures—by providing other means for people on very low incomes to access short-term credit, including credit unions and a reformed social fund. The hon. Gentleman is doubtless right to say that such things will happen, but we need to introduce other measures to prevent them from doing so.
The other interesting aspect of the South African Bill is the prohibition of reckless lending. The South African DTI is essentially placing a duty on the lender to meet his responsibilities, and to secure information about the borrower's current financial situation in advance of making a decision on the loan. Of course, "recklessness" has a well-rehearsed meaning in English common law, which the South African Bill sets out. It also introduces a new definition of over-indebtedness, and enables a new regulator to set the terms of repayment when a borrower has got into difficulty and needs some help getting out of it. So there are a number of interesting ideas in that Bill that the Minister might want to have a word with his South African colleagues about.
In modern politics, consensus is meant to be a universal good, but I must admit that when Front Benchers of all three main parties speak with one voice, a shiver goes down my spine. The more heretical voices that we have, the better. I am glad to hear that there are one or two such voices on the Labour Benches, and I certainly join them. There are three things that I will certainly push for during the later stages of the Bill's consideration. The first is the introduction of a responsible lending test, or at least the placing of a duty on the lender to take account of the borrower's ability to repay. That also gives rise to the question of data sharing, which Norman Lamb discussed.
Secondly, I should particularly like the Bill to address default charges. I am not completely clear about the current legal position of default charges. I was under the impression that it was already illegal, or certainly against the banking code, for default charges to include any profit margin.