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The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe): On Monday 8 December, my right hon. Friend the Secretary of State for Trade and Industry published the White Paper "Fair, Clear and Competitive: The Consumer Credit Market in the 21st Century", which tackles the problem of loan sharks.
Mrs. Williams : I thank my hon. Friend for that answer on a matter that causes great misery, particularly during the time leading up to Christmas and the new year, for people of all ages and their families. May I ask him to be more specific and tell the House what the Government are doing to protect people from illegal and extortionate door-to-door loan sharks, who prey on the most vulnerable group of people in our society?
Mr. Sutcliffe: I acknowledge the expertise that my hon. Friend has in this areaI believe that she was involved with citizens advice bureaux before coming into the House. Clearly, attacks by loan sharks on vulnerable people are important to this Government, which is why we have introduced a pilot scheme in Glasgow and Birmingham, whereby the police, local authority trading standards and a variety of other organisations come together to look at ways of tackling loan sharks, because people are always frightened to come forward. We hope that that will determine best practice, and that the scheme will be rolled out to the rest of the country.
Mrs. Cheryl Gillan (Chesham and Amersham) (Con): I am interested in what the Minister had to say. Does he agree that the unscrupulous selling of loans and various other "unbeatable" financial offers are now coming from all directions to our citizens? I get five letters a week at my London flat addressed to me or my husband, and we also now receive such offers by e-mail and from call centres abroad. Can he reassure me that even if he does not have the instant answer to this problem, he is planning and thinking about how we can stop this constant bombardment of our innocent citizens by people abroad who are no more than fraudsters?
Mr. Sutcliffe: I accept what the hon. Lady says. It is right that part of the White Paper focuses on responsible lendingmaking sure that lenders lend responsiblyand that a number of scams are operating from Canada and outside the European Union. We have signed a memorandum of understanding with the Canadian Government, the Australian Government and others to try to locate the perpetrators of those scams, and we are working together to try to resolve these issues.
Mr. Barry Gardiner (Brent, North) (Lab): Does my hon. Friend share the concern of many consumer organisations that door-to-door collection of loans should be separated from the selling of loans? Part of the problem is that the relationship built up by people who
Mr. Sutcliffe: I acknowledge the expertise of my hon. Friend in this field. He is right that we are working closely with the industry and consumer groups to examine the detail of how to separate the problem. What is key is that consumers understand fully what they are letting themselves in for in terms of loans. That is why we are looking for transparency in making sure that a summary box in adverts tells people exactly what they are borrowing, how much they are paying back, and how long it will take them to pay it back.
Dr. Vincent Cable (Twickenham) (LD): Does the Minister accept that the unsolicited, aggressive promotion of debt comes not simply from scams in Canada but from our leading banks and credit card companies? Can he explain the logic by which, this morning, the Government are outlawing unsolicited spam on e-mail but are unwilling to act against unsolicited credit promotion by our leading financial institutions?
Mr. Sutcliffe: The hon. Gentleman is not correct that we are not prepared to act. He will read with interest, as I shall, the Treasury Committee's report on how lending operates in the UK, which I understand will be out next week. I am confident that UK consumers will be better off because of the White Paper and, I hope, the Treasury Committee's findings.
Miss Anne Begg (Aberdeen, South) (Lab): It is not only loan sharks who sell loans unscrupulously. I have a constituent who borrowed £4,000 to buy a car. The APR was 28.5 per cent. and by the time that my constituent included add-ons such as insurance and breakdown cover, he found that he was paying back about £8,000. What are the Government going to do about that?
Mr. Sutcliffe: Again, I acknowledge my hon. Friend's work on the matter in her constituency, and she is quite right. We are examining ways of calculating APR because there are two ways of doing that at the moment and we want to make the process simpler. We are also examining the problem for people who get small loans because, as she said, administrative and other charges can make the APR look outrageous. We do not want to put those who provide such loans out of the marketplace because they offer a useful service, but we want to ensure that people are protected and that they understand what they let themselves in for.
The Secretary of State for Trade and Industry (Ms Patricia Hewitt): As the House knows, we have strongly opposed the unlawful tariffs that the United States imposed on our steel exports. We worked extremely closely with our European partners in the successful
Dr. Kumar : I thank my right hon. Friend for that reply and praise her hard work on behalf of the steel industry. Everyone welcomed her when she visited Teesside steel works, and she has lobbied President Bush hard on the illegal steel tariffs that he introducedI am delighted that we have got such an outcome. Does she realise that the steel maker Corus recently admitted that its sales were down by 10 per cent. in America in the past six months, which will obviously have a knock-on effect on its profits? Is my right hon. Friend in a position to say whether the Government are willing to give any help or support to overcome the difficulties that the steel industry has faced?
Ms Hewitt: I thank my hon. Friend for what he said. We have been working closely with Corus and the Iron and Steel Trades Confederationthe trade unionand its members to help Corus and the wider steel industry. I am glad that we were able to get about 70 per cent. of UK steel exports exempted from the tariffs when they were in force. None the less, the tariffs have hit Corus hard. We all hope that with the growth that is taking place in the United States, steel exports will begin to pick up. I know that my hon. Friend welcomes, as I do, the success that the new management of Corus is beginning to have in putting a new financing package in place, working in much closer partnership with employees and their trade unions, and creating a positive relationship with the Dutch branch of the business to ensure that Corus and its work force will have a strong future.
Mr. James Arbuthnot (North-East Hampshire) (Con): Does the Secretary of State agree that it is welcome that the United States has recognised that steel tariffs have done real damage to its manufacturing industry, as tariffs usually do? What steps is she personally taking to ensure that with its proposed licensing system, the United States will not introduce steel tariffs by the back door?
Ms Hewitt: I welcome the right hon. Gentleman to his new place on the Front Bench, although I cannot help but observe that it appears to take two Conservative men to do the job of one Labour woman. We have looked closely at the small print of not only consumer credit agreements, but the announcement by the United States on steel tariffs. I do not believe that it intends to introduce new tariffs or import barriers through the back door, but we are examining closely what it means by "monitoring imports" because we want to ensure that what we have succeeded in defeating through our partnership with Europe and work in the WTO will not re-emerge. I will continue to work extremely closely with our steel industry on the issue, but at this point we have no evidence whatsoever to suggest that Washington might do what the right hon. Gentleman fears.
Mr. Martin O'Neill (Ochil) (Lab): I congratulate my right hon. Friend on her efforts in securing that outcome. It is a victory not only for common sense but for the WTO, as a rules-based trading organisation, in enforcing those rules to fulfil its responsibilities. Does
Ms Hewitt: My hon. Friend is absolutely right, and as part of strengthening the WTO as we move forward in the development round it would be helpful if we could resolve disputes much more quickly. I return to the point made by the right hon. Member for North-East Hampshire (Mr. Arbuthnot) that the United States manufacturing sector, including its car-building industry, has become increasingly concerned about the impact of those steel tariffs on wider industry in the US. It was able to deploy that argument to good effect, as were we, and that reinforces the case that we consistently make for free and fair trade. Such trade has benefited us enormously in the European Union, and it needs now, within the WTO, to benefit the whole world.
Mr. Mark Field (Cities of London and Westminster) (Con): I appreciate the Secretary of State's hard work, and she is absolutely right to point out that the promotion of free and fair trade should be the cornerstone of Britain's policy. She will recognise, however, that this country, either as an individual nation or as part of the EU, still has tariffs in place, and they are a hindrance to ensuring that we are able to counter global poverty, particularly in developing countries. I should be interested to hear what she has to say about the efforts that she will be making to try to promote free and fair trade and to cut tariffs that affect the third world.
Ms Hewitt: I welcome the hon. Gentleman's support for the cause of free and fair trade. One of the most damaging aspects of the EU has been the impact of the common agricultural policy. It is through our commitment to EU membership, the alliances that we have built with other membersin striking contrast, let me say, to the isolation of the UK Government under the hon. Gentleman's partyand our positive approach that we were able to get such a good outcome on CAP reform in June. That will help us as we move forward with the Doha round, so that more developing countries can sell products to us, to their benefit and to the benefit of our consumers.