Lib Dems join Tories to block action against loan sharks

Hull North MP Diana Johnson has condemned Lib Dem and Tory MPs for voting down a Labour call for Government action against high cost lending by loan sharks.

After months of delay, ministers have been put under renewed pressure to get a grip on the problems caused by payday, doorstep and other high-cost lenders, especially to consumers in the most deprived areas of the country.

The Hull North MP voted for a Labour amendment to the Finance Bill that would have forced ministers to introduce measures that would put an end to the exploitative practices of so-called "legal loan sharks".

The amendment was voted down by Lib Dem and Tory MPs by 273 votes to 228.

Speaking after the vote in the House of Commons, Diana Johnson MP said: ""It was a disgrace that Lib Dem MPs joined the Tories to block even this most limited action against the loan sharks who cause so much misery in places such as Hull.

"Given the rapid expansion of high-cost lenders in Hull and around the country, it's time that the Government faced up to this problem before it gets out of hand. There is no legitimate reason to delay action.

"The payday lending activities of firms such Wonga, Money Shop and Cash Converters are expanding. Rising prices and the Government squeeze on living standards is causing more people, usually the least well off, to take out these expensive and debilitating loans.

"Better financial education and ethical finance organisations such as credit unions have a role to play in solving this problem, but we need the Government to limit the extreme activities of these high interest lenders. Yet we hear nothing from ministers about what they propose to do, despite the fact that this type of lending is tightly regulated across Europe and North America.

"I was therefore delighted to vote for this Labour amendment to force the Government to look seriously at how to protect British consumers from loan sharks. It's a disgrace that Lib Dems and Tories joined forces to protect the loan sharks instead."

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