Ed Miliband will today (Thurs) set out how the next Labour Government will raise millions of pounds through a levy on the profits of payday lenders - money which will be used to double the public funds available for low cost alternatives such as credit unions.
He will also announce that Stella Creasy, the new Shadow Minister for Competition and Consumer Affairs, has been given special responsibility to lead One Nation Labour’s campaign against abuses by legal loan sharks which have blighted Britain’s high streets and left many families with huge levels of personal debt.
The Labour leader will show how the latest proposals are part of One Nation Labour’s plan to tackle the worst cost of living crisis since 1870. He will also praise the work done by Labour campaigners across the country in helping families deal with soaring personal debt.
The measures he is announcing today come in addition to previous policy commitments on capping the cost of credit and giving local authorities new powers to limit the spread of payday lending shops in town centres.
On a visit to Peckham with Ms Creasy, Mr Miliband will visit the office of a credit union and meet some of the people who have suffered at the hands of payday lenders.
Ed Miliband is expected to say:
“The cost of living crisis afflicting millions of Britain’s families is so bad that it is creating a personal debt crisis too.
“The prices families have to pay keep on rising faster and faster than the wages they are paid. And, as a result, the market in payday lending has doubled in just four years. Almost a third of the payday loans taken out in Britain at the moment are to cover the cost of people’s gas and electricity bills.
“For too many families the end of the month is now their own personal credit crunch.
“A One Nation Labour Government would deal with the causes of the cost of living crisis. But it would also act to help prevent people falling into unpayable debt with radical reform of the payday lending market.
“We would cap the cost of credit, halt the spread of payday lenders on our high streets and force them to fund the credit unions that can offer a real alternative for people in desperate need.
“We must protect the most vulnerable people in our society from the worst of exploitation by payday lenders. And it is right that the companies that benefit from people’s financial plight, accept their responsibilities to help ensure affordable credit is available.”
Stella Creasy is expected to say:
“Across the country Sharkstoppers and Debtbusters campaigners are working to address the damage payday lending debt is doing to the finances of millions of families who are struggling to make ends meet.
“Whether helping to increase the capital credit unions have to enable them to lend more, kicking these companies out of their football grounds and shopping centres, or supporting debt advice to those caught in spiral of debt by the practices of these firms, these are the people dealing first hand with this Government’s failure to learn from other countries in capping the cost of credit.
“We are determined to see a cap introduced in the UK so that we can see an end to this legal loan sharking and give British consumers the protection they deserve.”