Campaigners push for debt ruling details

Campaigners push for debt ruling details





Debt campaigners are using the Freedom of Information Act in an attempt to force the Government to reveal why it rejected capping interest rates.


Campaign group Debt on our Doorstep, comprising a network of organisations including Oxfam, YMCA England, Citizens Advice Scotland and credit unions, claims that research commissioned by the DTI on interest rate caps was ‘flawed in its starting point, processes and conclusions’.


The DTI used the research, published in September, as a basis for ruling out a cap on interest rates in the Consumer Credit Bill, currently going through Parliament.


Under the Freedom of Information Act, which came into force on 1 January 2005, anyone can request information held by public authorities and expect an answer within 20 working days.


A report published this week by social policy research charity the Joseph Rowntree Foundation found that no existing credit sources fully meet the needs of the poorest people and warns that many proposals to tackle high-cost lending, such as interest rate caps, are likely to drive the commercial market away from lending to these groups.


Professor Elaine Kempson, who compiled the report with Sharon Collard, explained: ‘Although well-meaning, many proposals for tackling high-cost lending, for example a ceiling on interest rates, would risk accelerating this (commercial shift away from lending to people on low incomes), leaving poor people with less choice and higher costs.’


The report concludes that the greatest potential for widening access to more affordable credit lies in reducing the cost of commercial credit, increasing the availability and sustainability of not-for-profit lenders such as credit unions, and by extending access to the Government’s Social Fund, a major provider of credit to low-income families.


– Affordable Credit: The Way Forward is available via