Queen's Speech measures given cautious welcome
23rd November 2004

The Queen's Speech today detailed proposals for the introduction of a Consumer Credit Bill which aims to secure greater protection for low income consumers, and to tackle extortionate lending. As expected, the Government has indicated that it does not intend to introduce a cap on interest rates. Malcolm Hurlston at the Consumer Credit Counselling Service, which is funded by credit lenders, expressed relief that a cap was not to be introduced.

Debt on our Doorstep welcomed the commitment to introduce new legislation and aims to work with the Government to ensure that the changes achieve real protection for low income borrowers during the passage of the bill. However, we have ongoing concerns that the measures as outlined prior to today's Queen's Speech (which include the introduction of an 'unfairness test') do not go far enough and may not prove effective.

We await the detail of the proposals, together with draft guidance on the proposals from the OFT, which the DTI has pledged to pr ovide prior to putting the bill before Parliament.

Damon Gibbons, Chair of Debt on our Doorstep, responded to today's announcement:

'We support the Government's intentions to bring fairness back into the Consumer Credit Market. However, we don't think that the proposals as they currently stand will achieve that aim. The failure to introduce a cap on credit charges is a real let-down for millions of low income borrowers, but we will look at the detail when that is available and make suggestions as to how consumers could be protected better even without a cap.

The proposed unfairness test as it stands at the moment isn't a great step forwards from the current law and needs a lot of further work. We also want to have some details as to how the decision on the cap will be kept under review, which is something that the Government promised back in August.'