Will Parliament soon decide to clamp down on payday loans? The controversial firms, offering ultra-high interest short-term loans, have proliferated on high streets and across the Web, utilising crafty advertising to make them appear far less dangerous than the 4,000 per cent APR would imply. Our Campaigner of the Year, Stella Creasy MP, has been fighting for legislation to regulate the firms, after witnessing the consequences of the 17 payday loan businesses in her consistency. Ahead of a crucial Commons vote on her proposals to regulate the firms, polling by ComRes has given her a boost, with strong support inside and out of Parliament for action on the matter.
MPs and public are for once united — 98 per cent of MPs stated support for measures to restrict payday loan companies, compared to 93 per cent of the public. In particular, stricter advertising rules are popular, with support from 83 per cent of MPs and 68 per cent of the public. Creasy’s preferred measure — a cap on the total cost that can be charged for credit — also has strong support, with 66 per cent of MPs and 65 per cent of the public endorsing it.
Until now, the government has stood firmly against any formal regulation, but without much explanation. During a debate last month on Creasy’s amendment to the Financial Services Bill, the Treasury minister was, she says, ‘rivalling the Olympics in terms of the gymnastics he was committing,’ when it came explaining why the government hadn’t published their legal advice on providing formal
powers to tackle payday loans. The lack of concrete publication caused some cross-party rumblings, with Nick de Bois MP attempting (unsuccessfully) to pin the minister down on releasing the papers. When I asked Creasy for her thoughts on this, she said that she did ‘wonder whether they have taken legal advice as to whether or not they want price intervention powers.’
Although a full scale rebellion is unlikely, the mysterious situation may give members pause for thought as they weigh up their vote. The government is not only looking evasive on this, but, by being so, they’re also operating against public opinion.
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