It is an honour to follow Paul Blomfield. I was proud to support his
Bill and am sorry that it will not make its way through Parliament. I hope that the Government are listening carefully to the cross-party support that it is getting and will take forward some of the sensible measures proposed in it.
I also congratulate Chris Evans on introducing this debate on an important issue about which many of us feel strongly. It is also important to congratulate Stella Creasy, who has done a great deal to raise the issue both inside and outside Parliament. During many parts of her speech today I was nodding furiously, as I found myself in violent agreement with her on some of the important issues that she raised.
I am sorry that my hon. Friend Damian Hinds has left the Chamber. He has done a great deal of work on credit unions. I also fundamentally support the work that my hon. Friend Justin Tomlinson has done on improving financial education.
The debate has been interesting and I will try not to repeat the points hon. Members have made. My hon. Friend Jackie Doyle-Price said that the sector is at a crossroads, which was an interesting comment. We must ensure that we take the right path. High-cost credit is an incredibly important issue for many of our constituents and will be in future for all the reasons hon. Members have outlined.
High-cost credit is defined as credit
“comprising of payday and other short-term small-value loans”.
However, it is important to note that it is not the preserve of alternative financial services providers. There are problems in the wider credit industry. The example I will give is highlighted by StepChange. Its research shows that
“a borrower making minimum payments for 18 months on a typical” credit
“card for an average balance of just over £1,800 pays £44 for every £100 borrowed”.
It is important that we do not exclude from the debate means of credit other than payday loans.
When I first spoke in Parliament about high-cost credit, I drew on my experience. When I came to London as a 21-year-old graduate, I worked as a researcher in Parliament, earning £7,000 a year. I got myself into a stupid amount of debt—£15,000—very quickly, not because I was trying to pay rent, meet bills and buy food, but because I wanted to keep up with the Joneses. I wanted to go out wearing nice clothes and to have good evenings out with my friends, all of whom worked in the City and earned a lot more money than I was earning. I borrowed a lot of money on credit cards, I was always at my overdraft limit, and borrowed money on store cards. I bought things on store cards that people normally pay for with small cash. I could not afford to live the life I wanted to lead in my not-very-well-paid job as a researcher.