MORPETH’S MP has urged the Government to take action over a system dubbed ‘legal loan sharking’.
Ian Lavery has showed his support for a cap on the costs of credit for consumers by signing an amendment to the Finance Bill.
It asks the Government to review whether the bank levy could be applied to companies which provide home credit and payday loans to stop them lending money in ways which are damaging to consumers.
The member for Wansbeck said: “Families across my constituency are really feeling the pinch with rising VAT, inflation and a wage freeze hitting the money they have to make ends meet.
“In these difficult economic times it’s no surprise nearly half of all households in the UK find their pay checks don’t stretch to the end of the month and that increasing numbers are turning to home credit and payday loans as a result.
“Yet whilst these loans can seem like an attractive short term solution to financial hardship, with interest rates of 4,000 percent or more for many they become a long term debt problem.
“Despite calls from MPs across Parliament for action, the Government is dragging its feet in responding — that’s why I’m backing this amendment to make sure something is done.”