A victory against usury

The government agrees to act on payday lending.

It gives me great pleasure to say that those of us who campaign to reduce the grip that payday lenders have on the most vulnerable individuals and families in Britain have won a very important victory. The Government has agreed to provisions within the Financial Services Bill providing the newly created Financial Conduct Authority (which will come into existence 1 April 2013) with the power to cap the cost of credit agreements.

While many were understandably focusing on the Autumn Statement, it was finally agreed by the government on Wednesday that the FCA will be able to create rules that:

  • Prohibit the charging of certain types of fees which it considers to be unacceptable;
  • Prohibit the charging of costs above an amount which it specifies as unacceptable; and
  • Prohibit rollover lending, where a debtor arranges separate credit arrangements in order to settle existing ones.

One signatory to the successful amendment of the Financial Services Bill, Baroness Grey-Thompson, told me:

There are too many tragic stories of people who have got themselves in to a massive financial mess, which seems impossible to get out of. I hope that these proposals will crack down on the worst excesses of these loans. 

She continued:

Something that came up in the debate is that we need better access to loans for people, and that we should consider more credit unions. I am by no means an expert on financial matters, but it worries me that people can easily get themselves in to great financial difficulty.

Conservative MP for East Hampshire, Damian Hinds, while welcoming of the move forward by the government, has said that providing a cap on credit is only one part of the overall battle. A shift in direction needs to take place for credit unions too.

Commenting at Conservative Home, Hinds says:

The sector needs a sensible degree of change which maintains safeguards and comfort for customers, but allows them to get onto competition terms with payday and home credit lenders and rent-to-buy stores.

Both Baroness Grey-Thompson and Damian Hinds MP are correct – this is fantastic news. Damon Gibbons of the Centre for Responsible Credit has even called it a “historic moment”. But the fight doesn't end here. 

We must go further. We need:

  • The creation of a Community Reinvestment Act, which would oblige banks not lending sufficiently in local communities to sponsor local affordable lenders such as credit unions;
  • The reinstatement and centralisation of the social fund – something that could be operated through a credit union; and
  • Banks offering emergency overdrafts to more people without charging interest rates that rival those of payday lenders.

We have witnessed a great victory, and an actual government u-turn (I won't rub it in), but we cannot afford to be complacent. The fight against bad debt has only just begun. 

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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What happened when a couple accidentally recorded two hours of their life

The cassette tape threw Dan and Fiona into a terrible panic.

If the Transformers series of movies (Transformers; Transformers: Revenge of the Fallen; Transformers: Dark of the Moon; Transformers: Age of Extinction; and Transformers: the Last Knight) teach us anything, it is that you think your life is going along just fine but in a moment, with a single mistake or incident, it can be derailed and you never know from what direction the threat will come. Shia LaBeouf, for example, thinks everything is completely OK in his world – then he discovers his car is a shape-shifting alien.

I once knew a couple called Dan and Fiona who, on an evening in the early 1980s, accidentally recorded two hours of their life. Fiona was an English teacher (in fact we’d met at teacher-training college) and she wished to make a recording of a play that was being broadcast on Radio 4 about an anorexic teenager living on a council estate in Belfast. A lot of the dramas at that time were about anorexic teenagers living on council estates in Belfast, or something very similar – sometimes they had cancer.

Fiona planned to get her class to listen to the play and then they would have a discussion about its themes. In that pre-internet age when there was no iPlayer, the only practical way to hear something after the time it had been transmitted was to record the programme onto a cassette tape.

So Fiona got out their boom box (a portable Sony stereo player), loaded in a C120 tape, switched on the radio part of the machine, tuned it to Radio 4, pushed the record button when the play began, and fastidiously turned the tape over after 60 minutes.

But instead of pushing the button that would have taped the play, she had actually pushed the button that activated the built-in microphone, and the machine captured, not the radio drama, but the sound of 120 minutes of her and Dan’s home life, which consisted solely of: “Want a cup of tea?” “No thanks.” And a muffled fart while she was out of the room. That was all. That was it.

The two of them had, until that moment, thought their life together was perfectly happy, but the tape proved them conclusively wrong. No couple who spent their evenings in such torpidity could possibly be happy. Theirs was clearly a life of grinding tedium.

The evidence of the cassette tape threw Dan and Fiona into a terrible panic: the idea of spending any more of their evenings in such bored silence was intolerable. They feared they might have to split up. Except they didn’t want to.

But what could they do to make their lives more exciting? Should they begin conducting sordid affairs in sleazy nightclubs? Maybe they could take up arcane hobbies such as musketry, baking terrible cakes and entering them in competitions, or building models of Victorian prisons out of balsa wood? Might they become active in some kind of extremist politics?

All that sounded like a tremendous amount of effort. In the end they got themselves a cat and talked about that instead. 

This article first appeared in the 20 July 2017 issue of the New Statesman, The new world disorder