My Lords, I support the noble Lord, Lord Sharkey, but I speak from a slightly different point of view. After so many years in your Lordships’ House, from time to time certain problems are raised with me when people have nowhere else to go. I want to talk about the link between the payday loan and credit and other things, particularly unemployment.
Take the situation at the moment of the young unemployed, or with some sort of weighting allowance in some form or other, who want to buy a mobile telephone or an iPad or something like this. They go along to any one of the suppliers, which then offers them a package that means they do not need to pay £500 up front but can pay it later. They sign up to something that they do not quite understand and then find that they cannot meet the necessary payments. They may have various allowances but, before they know it, the pressure builds up. So what starts as a £500 transaction can multiply into £1,000 fairly quickly. They cannot afford to pay the bill, so they go to a payday loan company—I will not mention their names—which, without the necessary research, offers them facilities at an exorbitant rate of interest. What starts with the wish to buy an iPhone or something of that sort for £500,when they have not got the money up front, can turn into nearly £5,000.
That is a worry that I had not fully appreciated, and I have tabled a Question next week on the subject. If you have no income and are not employed, you cannot have a payday loan. However, here you have people who get allowances from the state actually getting payday loans. There is something immoral or wrong about that. I do not want to make a fuss about it tonight, but I have quite a lot of evidence and research on it. It worries me because this is a generation of unemployed who have got into a level of debt that they cannot cope with. This issue is becoming increasingly important.