Andrew Smith MP

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Andrew vows continued support for credit caps

ELLS.jpgThe coalition has scuppered opportunity to protect the public from legal loan sharks.

Andrew expressed his disappointment as yet again the coalition government rejected Labour attempts to protect consumers from the problems caused by payday lending.

Andrew today voted to support a cross party amendment to the Financial Services Bill which would have allowed the regulator to cap the cost of credit if a financial product was judged to cause 'consumer detriment'.

Despite the support of several MPs, the coalition government whipped its MPs to reject the amendment.

The coalition government's rejection of this reform came on the same day as new research was published which showed that 98% of MPs and 93% of the public believe there is a problem with payday lending. 66% of MPs and 65% of the public also support a cap on the total cost of credit.

Andrew said: "Residents of Oxford East are suffering in our current economic climate as the cost of living rises, wage freezes and unemployment hit their household incomes. I know from talking to them how they are turning to credit from these companies to make ends meet. They lend money at extortionate rates of interest that can cause a cycle of debt for many, with one in three payday loans being taken out to pay off other payday loans.

"This amendment to the Financial Services Bill would have sent a message to the industry that their worst excesses would no longer be tolerated. Despite saying they support action, too many Lib-Dem & Tory MPs didn't have the guts to stand up for the people they represent. By voting against this proposal, this coalition government has shown just how out of touch it is with the rest of the country. The research is clear -- across Britain everyone else overwhelmingly backs our proposals to take action to tackle the debts that payday lending can cause and to give UK consumers the same protection others round the world enjoy.

"We will now take the fight for this proposal to the House of Lords as this isn't over -- residents in Oxford East should know that whilst the Government may sit on its hands, Labour will continue to campaign for an end to legal loan sharking in Britain".

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