§ 3. Mr. Archy Kirkwood (Roxburgh and Berwickshire)If he will ask the social exclusion unit to conduct a review of debt and financial exclusion. [86320]
§ The Minister for Social Exclusion and Deputy Minister for Women (Mrs. Barbara Roche)Our approach for a more inclusive society is to address the root causes of poverty and social exclusion. Improving financial inclusion is central to this. Decisions on future unit projects will be made shortly.
§ Mr. KirkwoodWill the Minister reconsider the possibility of producing a further report on current levels of debt, especially in low-income households? The evidence shows that their debt is spiralling out of control, and many of those families cannot cope either with the level of indebtedness or the rates of interest that they have to pay at the hands of loan sharks. Will she undertake to carry out a cross-departmental review to help such families to get out of the debt that they are in?
§ Mrs. RocheI certainly recognise the situation that the hon. Gentleman presents. The Department of Trade and Industry is reviewing the Consumer Credit Act 1974 to crack down on loan sharks and it will publish proposals in the new year. It is also important that we carry out work on credit unions, which have increased considerably since 1997, and implement pilot initiatives to discover how community-based organisations can get involved in such work. I shall certainly give careful consideration to his representations.
§ Mr. David Clelland (Tyne Bridge)I support what the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) had to say about loan sharks. Is my hon. Friend aware of a constituent of mine whose original borrowing of £7,500 has now increased to £43,000? The company demanding that money, Provident Financial, has made a profit of £700 million over the last five years, all on the back of the most vulnerable people in deprived communities. Something must be done about that, and urgently.
§ Mrs. RocheMy hon. Friend is right; there are some absolutely disgraceful cases, which is why the community finance and learning initiative is so important. Those pilot schemes promote financial education and good practice so that we can crack down on loan sharks, who cause a great deal of disruption to our community and feed off vulnerable people.