Tories may be wrong on national debt, but some are right on personal debt

The Bright Blue conference revealed some allies in the fight against the payday lenders

Last week I attended a conference run by the Tory "Fresh" group Bright Blue. There were plenty of faces I recognised and not all of them belonging to the "left wing" of the Tory party. After a few conversations it had become apparent that there is an anger across all wings of their party regarding the continued employment of George Osborne.

For the Tories, who fancy themselves as the party of fiscal responsibility (though as a Labour party member myself, I remain skeptical), the perception of Osborne's continued weak effort is the source of much frustration.

However to suggest that Osbornomics is the sum total of the financial thinking within the Conservative party would be an error. Take the area of finance that I'm interested in for example, that of personal debt – many in the party who are driven by principle rather than pride tend to sit on the correct side of the tracks here.

Justin Tomlinson MP, for example, the member for North Swindon, is one of the most vocal critics of the payday lending industry in parliament.

Earlier this year he addressed parliament during the debate on the clauses in the Financial Services Bill in support of imposing a total cost cap on loans that lenders can deal out to consumers. This, for him, is one way to ensure exploitative companies don't make life harder of those who are most vulnerable.

But Tomlinson understands that this cannot be a single policy enacted in isolation. This was why he, along with fellow Conservative member of parliament, Andrew Percy, authored a very interesting report on financial education. For them both, more focus on finance early on, can better gear up people when they are older to make healthy financial decisions – which can be hard to come by if times are tough on the pocket with more and more payday lenders popping up on our high streets.

With Percy, his interest in bad debt stems from his own problems with it. Though he has never had to take out a payday loan, he has been in the position of owing tens of thousands of pounds – for which as of 2011 he was still paying off.

"I now pay about £600 a month to clear off all of my credit cards which I've had to roll into a loan since my election", he told the BBC last year.

Another Tory MP, Tracey Crouch, member for Chatham and Aylesford, also came into focusing on debt issues as a consequence of her own past. When I spoke to her earlier this year she told me that her debts were down to "youthful stupidity" and her £15,000 credit card and store card debt was largely the outcome of living a lifestyle she couldn’t afford, which some of her peers could.

Crouch insisted that there is a positive side to credit, indeed most regard it as the sign of a healthy economy. However she herself has seen the negative side of it. She is particularly concerned about those who are termed the "underbanked", namely those those who still have bills to manage and cashflow problems to overcome, but are restricted in their access to mainstream credit products.

Given the rate at which the payday loans industry is growing, the temptation to see this as an easy way out for the very vulnerable increases. The government has a responsibility to do what it can to ensure all consumers do not fall foul to expensive loans, but also many of the barriers of alternatives such as credit unions need to be overcome too.

For example the Association of British Credit Unions (ABCUL) still haven't tapped into social media, and trying to raise credit union membership that way, whereas payday lenders such as Wonga have done this very successfully.

One person who does know a thing or two about credit unions is Damian Hinds MP, the member for East Hampshire. He chairs the All-party Parliamentary Group (APPG) on Credit Unions, and is a vice chairman of the APPG on Debt.

His politics are perhaps most interesting because he is a self-described free-market Conservative. He told me that when he first became an MP he was convinced that market solutions would drive down expensive lenders and anything the state could do would only frustrate this process.

However, he has since changed tack on this, deciding that "normal market rules don't apply with payday lenders". Now Hinds realises that the state can play a part in helping a create a fairer lending market since all evidence points out that the invisible hand is typically absent.

The legacy of Osbornomics will be negative – and Conservatives themselves are as adamant as anyone that this is the case. David Cameron is not being a renegade, but a fool for keeping him. But the Conservative party is not without sound economic minds – and on an issue as important as personal debt this is proven most forcibly.

A payday loan company in Birkenhead. Photograph: Getty Images

Carl Packman is a writer, researcher and blogger. He is the author of the forthcoming book Loan Sharks to be released by Searching Finance. He has previously published in the Guardian, Tribune Magazine, The Philosopher's Magazine and the International Journal for Žižek Studies.
 

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Air pollution: 5 steps to vanquishing an invisible killer

A new report looks at the economics of air pollution. 

110, 150, 520... These chilling statistics are the number of deaths attributable to particulate air pollution for the cities of Southampton, Nottingham and Birmingham in 2010 respectively. Or how about 40,000 - that is the total number of UK deaths per year that are attributable the combined effects of particulate matter (PM2.5) and Nitrogen Oxides (NOx).

This situation sucks, to say the very least. But while there are no dramatic images to stir up action, these deaths are preventable and we know their cause. Road traffic is the worst culprit. Traffic is responsible for 80 per cent of NOx on high pollution roads, with diesel engines contributing the bulk of the problem.

Now a new report by ResPublica has compiled a list of ways that city councils around the UK can help. The report argues that: “The onus is on cities to create plans that can meet the health and economic challenge within a short time-frame, and identify what they need from national government to do so.”

This is a diplomatic way of saying that current government action on the subject does not go far enough – and that cities must help prod them into gear. That includes poking holes in the government’s proposed plans for new “Clean Air Zones”.

Here are just five of the ways the report suggests letting the light in and the pollution out:

1. Clean up the draft Clean Air Zones framework

Last October, the government set out its draft plans for new Clean Air Zones in the UK’s five most polluted cities, Birmingham, Derby, Leeds, Nottingham and Southampton (excluding London - where other plans are afoot). These zones will charge “polluting” vehicles to enter and can be implemented with varying levels of intensity, with three options that include cars and one that does not.

But the report argues that there is still too much potential for polluters to play dirty with the rules. Car-charging zones must be mandatory for all cities that breach the current EU standards, the report argues (not just the suggested five). Otherwise national operators who own fleets of vehicles could simply relocate outdated buses or taxis to places where they don’t have to pay.  

Different vehicles should fall under the same rules, the report added. Otherwise, taking your car rather than the bus could suddenly seem like the cost-saving option.

2. Vouchers to vouch-safe the project’s success

The government is exploring a scrappage scheme for diesel cars, to help get the worst and oldest polluting vehicles off the road. But as the report points out, blanket scrappage could simply put a whole load of new fossil-fuel cars on the road.

Instead, ResPublica suggests using the revenue from the Clean Air Zone charges, plus hiked vehicle registration fees, to create “Pollution Reduction Vouchers”.

Low-income households with older cars, that would be liable to charging, could then use the vouchers to help secure alternative transport, buy a new and compliant car, or retrofit their existing vehicle with new technology.

3. Extend Vehicle Excise Duty

Vehicle Excise Duty is currently only tiered by how much CO2 pollution a car creates for the first year. After that it becomes a flat rate for all cars under £40,000. The report suggests changing this so that the most polluting vehicles for CO2, NOx and PM2.5 continue to pay higher rates throughout their life span.

For ClientEarth CEO James Thornton, changes to vehicle excise duty are key to moving people onto cleaner modes of transport: “We need a network of clean air zones to keep the most polluting diesel vehicles from the most polluted parts of our towns and cities and incentives such as a targeted scrappage scheme and changes to vehicle excise duty to move people onto cleaner modes of transport.”

4. Repurposed car parks

You would think city bosses would want less cars in the centre of town. But while less cars is good news for oxygen-breathers, it is bad news for city budgets reliant on parking charges. But using car parks to tap into new revenue from property development and joint ventures could help cities reverse this thinking.

5. Prioritise public awareness

Charge zones can be understandably unpopular. In 2008, a referendum in Manchester defeated the idea of congestion charging. So a big effort is needed to raise public awareness of the health crisis our roads have caused. Metro mayors should outline pollution plans in their manifestos, the report suggests. And cities can take advantage of their existing assets. For example in London there are plans to use electronics in the Underground to update travellers on the air pollution levels.

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Change is already in the air. Southampton has used money from the Local Sustainable Travel Fund to run a successful messaging campaign. And in 2011 Nottingham City Council became the first city to implement a Workplace Parking levy – a scheme which has raised £35.3m to help extend its tram system, upgrade the station and purchase electric buses.

But many more “air necessities” are needed before we can forget about pollution’s worry and its strife.  

 

India Bourke is an environment writer and editorial assistant at the New Statesman.