Government will look again at 'super complaint' powers

You may be forgiven for not being aware of the Financial Services Bill (FSB) which is currently making its passage through Parliament but a significant victory for consumers was won last week after I spoke to an amendment to the Bill.

The government has agreed to rewrite a section of the FSB to stop ‘super complaints’ from being brought by trade bodies.

Under the Enterprise Act 2002, super complaints can be made by designated consumer groups and are an excellent tool for raising issues of mass consumer detriment. Most recently Which? secured a ban on excessive debit and card charges after a super complaint highlighted the lack of transparency and high price of the charges which cost consumers millions of pounds a year.

I argued that the FSB would have undermined the Enterprise Act 2002. The wording of the Bill could be interpreted as allowing trade bodies (which represent firms) to bring super complaints. I maintained that super complaints were not designed as a tool for industry and that they already have a clear avenue of complaint to the regulator and therefore, should not be allowed to hijack this aspect of consumer protection.

The minister accepted my argument and will now bring forward a revision to the Bill to reflect the amendment.

Currently super complaints can only be used by bodies that genuinely represent consumers and have been used by bodies like Which? The Bill could have widened the groups who have this power to include trade bodies hijacking the system from consumers to firms.

I am pleased that the minister agreed that these powers should not be available to bodies representing professional businesses and investors but should remain as a powerful tool for true consumer representatives like Which? and Citizens Advice.

Budget 2012

This is a budget by millionaires for millionaires! A budget that gives to millionaires and takes from millions.

What we needed to see today was a Budget for jobs and growth and one which focuses every penny available on helping hard-pressed families in Wigan.

At a time when people on middle and low incomes are being squeezed by rising fuel prices, seeing their tax credits and child benefit cut, when one million young people are out of work and there’s a big deficit to clear, it is completely the wrong priority to cut taxes for those who can afford to pay. It shows just how out of touch George Osborne is with ordinary people.

Report backs action on 'opaque and poorly regulated' Payday lending Industry

I have welcomed a report of an influential group of MPs who have backed my calls for regulation of the Debt Management and Payday Lending industry.

As a record number of people turn to controversial payday loans as a financial crutch, they are being stung by cripplingly high interest rates. Payday loans are fast becoming a credit method of choice for consumers who need a quick fix for their money woes.

Figures from Consumer Focus found that the payday loan market has rapidly expanded from 0.3 million borrowers in 2006 to 1.2 million in 2009. In 2010 this figure jumped to 1.9 million and continues to grow. As the dire state of the economy has a huge impact on personal finances, millions of low income Brits are turning to payday loans to cover costs. Some are even using the short-term loans to cover mortgage and rental payments.

Only last month, The Office of Fair Trading announced that it is carrying out spot checks on 50 major payday lenders amid concerns that people are being given loans without proper checks being carried out.
The abuse of customers who are "over-indebted, vulnerable and desperate for help" has caused people to lose their home in some of the worst cases, the report from the Business, Innovation and Skills (BIS) Committee says.

It called for greater transparency from companies turned to by consumers to help them "make ends meet" after seeing their household budgets squeezed by high living costs and deteriorating employment conditions.
The Debt Management report urged the Government to limit the rolling over of payday loans and ensure lenders record all transactions on a database after taking evidence that some consumers have more than 20 such loans.

A fast-track procedure should be put in place to suspend lenders' credit licenses and the regulator should have more powers to ban products which are "harmful" to customers, the committee said.

The report also recommended that the standard annual percentage rate (APR) measurement should no longer be used to compare short-term payday loan costs, with typical APRs of 2,500% often meaning little to consumers.

Instead, the total cost of the loan including interest charged and fees should be made clear, including late payment penalties.

I have led a campaign for action against the industry and am now calling for Government to act in the interests of consumers and regulate the marketplace. My Bill to require fee charging debt management companies to advertise free alternatives received a 1st reading in October 2011. As Chair of the All Party Group on Debt & Personal Advice, I am calling on David Cameron to honour his promise to meet with me.

The industry has failed to crack down on irresponsible lenders, so this report is yet a further reminder, if one be needed, that the Government must act now to protect borrowers, the majority being from low income groups.

At present we have irresponsible lending, front loaded charges and astronomical interest rates applied. No wonder the industry sees the UK as a cash cow to return big profits at the expense of people.

Gillian Guy, Chief Executive of the national charity Citizens Advice said, "We’re pleased to see that the Select Committee has listened to us.

“More and more people are being offered payday loans that they simply can’t afford, and being sucked into further debt. Rollovers and up-front fees should be restricted as soon as possible.”

“The Committee is also right about a stronger code for fee-charging debt management companies. It should be easier for people to compare paid-for advice providers and get more free debt advice. Citizens Advice helps over two million people every year with their problems - many of which concern money and debt. And our advice remains free."

The report can be accessed at the following link.

St Aidan's Fairtrade Big Brew!

St Aidan’s Church, Winstanley invited people to take a step for Fairtrade today and join them at their Big Brew event.  The Fairtrade tea party was attended by local residents and members of St Aidan’s Church congregation.

The Big Brew was part of a national initiative by Traidcraft, the UK’s leading fair trade organisation, which encourages schools, churches, workplaces and other groups to host a Fairtrade tea party during Fairtrade Fortnight.

In addition to their monthly Traidcraft sale at the church, by hosting a Traidcraft Big Brew and raising awareness within the local community, St Aidan’s is helping families in the developing world to flourish.

Fairtrade is about better prices, decent working conditions, local sustainability, and fair terms of trade for farmers and workers in the developing world. By requiring companies to pay sustainable prices (which must never fall lower than the market price), Fairtrade addresses the injustices of conventional trade, which traditionally discriminates against the poorest, weakest producers. It enables them to improve their position and have more control over their lives.

Margaret Wanjiku and family

For tea farmer Margaret Wanjiku growing tea is now just one of many activities she carries out on her farm in Kenya, which help her to provide for her family. With training from Traidcraft she has learned how to keep bees, to harvest water, change the plants she grows –  and even keep rabbits.

Event organiser Patricia Boyle said, “I first became aware of Fairtrade through my cousin, a priest in Swaziland who helped establish Eswatini Kitchen, a Fairtrade Company that provides a fair and sustainable income for over 300 people."

“We have been selling Fairtrade products in St Aidans for about 9 years. Most of our stock is purchased from Traidcraft and our profit goes to CAFOD both of whom helped in the setting up of the Fairtrade Foundation."

“I'm very grateful to people in Winstanley for their support for the Big Brew and to the CO-OP for supplying goods for a Fairtrade raffle.”

To tackle poverty you need to increase trade as well as give aid. Fairtrade helps 7 and a half million people in the developing world. When we choose to eat, drink or wear fair trade products we help change the lives of millions of farmers, workers and their families in developing countries, like Margaret Wanjiku.

I back the Big Brew because it encourages people in Wigan to consider the power they have as consumers which does play an important part in changing lives for the better.

Kellogg's gives local school a helping hand at breakfast time!

Winstanley Community Primary Care Club received a boost today after cereal company Kellogg’s awarded a grant worth £450 to help fund its breakfast club.

Winstanley Community Primary School is one of 500 schools from across the country to receive a grant after research by Kellogg’s revealed that one in eight breakfast clubs have been forced to close because of budget cuts.

Kellogg’s launched the ‘Help give a child a breakfast’ campaign last October to help bridge the funding gap for schools as research showed the detrimental impact the closure of breakfast clubs could have according to teaching professionals across the UK.

I lent my support to the campaign by writing to local primary schools encouraging them to submit an application.

Eileen Sweeney, Winstanley Community Care Club Coordinator said, “Breakfast clubs are a lifeline for many children but with budgets being tight they could sadly become an unaffordable luxury in future."

“The grant will really help our club and we’ll look forward to spending the money on some new equipment and games for the children as well as a selection of the children’s favourite cereals.” 

I’m really pleased the school successfully applied for the grant to help it improve its breakfast club. Evidence demonstrates that getting kids to start the day with breakfast is so important in increasing attendance, punctuality and concentration levels as well as improved social skills.

Bruce Learner - Head of Corporate Responsibility and Partnerships Kellogg Europe said, “I’m really pleased we were able to help out. Breakfast clubs like the one at Winstanley Primary School are such lively and energetic places: a brilliant way to start the school day.”

Kellogg’s is donating £230,000 in total through the campaign which will provide one million breakfasts by the end of 2012.