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Lending (Regulation) Bill

I begin by commending the hon. Member for Dumfries and Galloway (Mr. Brown) for introducing the Bill and for the way in which he did so. As we have heard, the Bill is intended to address one of the most important and, I suspect, long-lasting problems that this country faces, namely debt. Personal debt is now more significant here than in any other major economy. Estimated as standing at, I believe, £1.4 trillion, it is now larger than the UK's entire gross domestic product. Of course, the Government themselves have been borrowing and spending recklessly, leaving us with a national debt in excess of £1 trillion. During the good years, they failed to prepare for the downturn, and as we know, the result is a burden that will fall on us and on future generations. The Bill addresses one aspect of personal debt, namely credit card debt. I know that many Members will, like me, have seen appalling instances of individuals finding themselves with dreadful debts that they have no prospect of clearing. Whether those debts came through momentary weakness or, on occasion, financial ignorance, people are beginning to realise just how burdensome consumer credit card debt can be. Although individual borrowers are primarily responsible for the situation in which they find themselves, the hon. Gentleman is right to highlight the responsibilities of the credit card industry. Sharp practice must be identified and tackled effectively. That is why, a few weeks ago, my party set out a clear plan of action that mirrors many of his concerns. For example, our approach would include the provision of a free national financial advice service, funded by the financial services sector. We would also clarify and improve the standard of information provided for credit card customers and end excessive store card interest rates. Those measures would be part of a package that would relate to many of the hon. Gentleman's points. Essentially, they would be about informing, empowering and protecting the consumer. That is why the Opposition will not seek to oppose the Bill. We share many of the concerns of its sponsors, but I say to the hon. Gentleman that we are not yet convinced that, as currently drafted, it is necessarily the right way forward. I shall give a couple of examples of why that is the case. First, it would ban unsolicited credit card cheques and unsolicited increases in credit limits. That aim is laudable, but my concern is that that would not necessarily tackle the fundamental problem. Inevitably, the unscrupulous would find other ways to entice people to borrow. If we are to deal with the fundamental problem, we need to address the reason why some people make bad borrowing decisions. After all, when there is an unsolicited increase in credit limit, not everybody uses it, at least according to the evidence that I have seen. Only some people spend the extra money. Sadly, as the hon. Gentleman said, it is often those who can least afford to do so. To really help, we need to ensure that people are better informed so that they can learn to borrow within their means.