Personal Debt and High Interest Lending

Thank you for contacting me recently regarding personal debt and high interest loans.

I agree we need to promote more sustainable forms of personal lending such as credit unions and to provide greater support and advice for people facing debt problems.

The alarming growth we have seen in the high-interest loan market is further evidence of the current Government’s failure to tackle the cost of living crisis or to build an economy that works for working people. Working people are on average £1,600 worse off under the Tories – this is the first Parliament since the 1920s where living standards have got worse.

A Labour Government will tackle the scourge of household debt by introducing a new levy on payday lenders, using the funds raised to boost low-cost alternatives like credit unions. Labour will also give local authorities the power to restrict the number of payday lenders or other shops that are clustering on a single high street.

We will make work pay by increasing the National Minimum Wage to over £8 an hour by October 2019, and introducing a lower 10p starting rate of tax. We will promote the living wage with tax breaks for those companies that sign up to become living wage employers, requiring listed companies to report on whether they pay a living wage, and tackle insecurity at work by banning exploitative zero-hours contracts.

I know how strongly many local people feel about this issue and that organisations such as Step Change have helped highlight the need for much greater action to prevent personal debt and improve debt advice services. I believe we need a Labour Government to address this and to build an economy where people are not drawn into the arms of high-interest lenders.

Thank you once again for writing to me and for sharing your views.