MP Robin Walker leads calls for payday loan companies to fund free debt advice (From Worcester News)
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MP Robin Walker leads calls for payday loan companies to fund free debt advice
5:07pm Tuesday 21st January 2014 in News
A WORCESTER MP led calls for controversial payday lenders to fund free debt advice during a key debate.
Robin Walker spoke in today's (Tuesday's debate) in Westminster Hall during a debate he called himself. The debate followed on from a one by the Backbench Business Committee the previous day.
Mr Walker welcomed the cross party support on the issue as tighter regulations are imposed on lenders by the Financial Conduct Authority over the next year. Payday lenders will then have to pay a levy to cover the costs of regulation and to fund the Money Advice Service and through them, the provision of free debt advice services.
Mr Walker, who addressed MPs including Bromsgrove MP and treasury minster Sajid Javid from the Government's Money Advice Service, said: "Many honourable members may be as surprised as I was to note that, to date the highest cost lenders have not had to make the same contribution to free debt advice services as their competitors in the banks and the credit unions.
"However there is a real concern that, should the machinery of regulation and the levy remain as it currently stands and no guidance be provided, the opportunity of these lenders contributing to the levy might be missed in terms of providing additional resource to free debt advice."
Mr Walker praised the impartial debt advice of the Citizens Advice Bureau and Worcester Housing and Advice Centre as well as the work of other small debt advice charities such as Two Pennies Money Advice and Christians Against Poverty in Worcester.
He said: "The Money Advice Service meanwhile has been under pressure to show it is delivering value for money and running efficiently and they have told me and other honourable members that they have no current plans to ask for an increased budget in the years to come.
"Should things remain as they are therefore, the accession of new organisations to paying the levy and contributing at last to the budget for free financial advice, could be a missed opportunity whereby they make a contribution only to see it cancelled out by a levelling down of the charges to other financial institutions."
Mr Walker wants to see the proceeds of the levy for debt advice allocated amongst an even wider group of organisations including some of the smaller players in the voluntary free debt advice sector, alongside the major providers.