HC Deb 04 June 1957 vol 571 c1060
21. Mr. Osborne

asked the President of the Board of Trade in view of the inflationary effect of the excessive rates of interest charged on certain hire-purchase transactions, if he will consider introducing legislation to reduce and to limit these charges, and to compel a full disclosure on every contract before it is signed.

Mr. Erroll

No, Sir. With regard to the second part of the Question, under existing legislation, agreements to which the Hire-Purchase Acts apply must show both cash price and hire-purchase price and my right hon. Friend does not think it necessary to extend the scope of this requirement.

Mr. Osborne

is my hon. Friend aware that the high cost of money in hire-purchase transactions is putting up the real cost by about 50 per cent.? Will he not take steps to curb this evil?

Mr. Erroll

Hire-purchase charges, of course, include costs in addition to interest on the money which is being used.

Miss Lee

is the hon. Gentleman not aware that hire-purchase is used in the main by poorer people? Can he explain why, on the average, they have to pay 12 per cent. interest for hire purchase, whereas other people with capital assets can get a bank overdraft for half that amount?

Mr. Erroll

That is because the cost of hire-purchase must include the cost of collection, insurance, bad debts, and other items which must be recouped.