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Unscrupulous Lenders

4. John Robertson (Glasgow, North-West) (Lab): What steps he is taking to protect the most vulnerable and poorest members of society from unscrupulous lenders. [33378]

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe): The Consumer Credit Bill, which is currently before the other place, will improve the regulation and monitoring of consumer credit businesses and extend protections, rights and means of redress for consumers against unscrupulous lenders. Furthermore, the Government are funding two pilot schemes aimed at tackling loan sharks in Birmingham and Glasgow. That will enable trading standards officers to prosecute illegal lenders in those areas and gain a clearer understanding of the scope, extent and impact of illegal money lending.

John Robertson: I thank my hon. Friend for that answer. Will he join me in welcoming the results of the pilot scheme in Glasgow, where prosecutions have been brought? However, he will be aware that the approach of Christmas makes the pressure on families even stronger than normal. Does he agree that credit unions can help people in need? Will he do something to lessen the amount of red tape that credit unions have to deal with?

Mr. Sutcliffe: First, may I acknowledge my hon. Friend's thanks to the loan shark pilot team in Glasgow? It is working very well, and has managed to get individuals put behind bars for the way that they treat vulnerable people. Credit unions are very important, and I am talking to Treasury colleagues about ways to reduce the administrative burdens that they face. Their work, and the new Consumer Credit Bill, will alleviate the problem and usher in a period of responsible lending and borrowing, with people at the bottom end of the scale, who have the most problems, getting the support that they need.

Dr. William McCrea (South Antrim) (DUP): Given that unscrupulous lenders are spread across the UK, will the Minister speak to his ministerial colleagues in the Northern Ireland Office to ensure that those rogues are dealt with effectively in Northern Ireland as well?

Mr. Sutcliffe: It is important that we look at what is happening all over the UK, including Northern Ireland. We are acquiring much evidence and gaining new skills about how to tackle the loan shark problem. Loan sharks prey in the most horrible way on vulnerable people. We have made sure that people are able to get
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advice and support. Through the Office of Fair Trading licensing scheme, we are ensuring that people who lend money are reputable.

Mr. John McFall (West Dunbartonshire) (Lab/Co-op): The Minister knows that financial inclusion is one way for people to get out of the hands of unscrupulous lenders, and that the Treasury Select Committee has set up an inquiry into financial exclusion to which he will be invited in the new year. However, there is poor co-ordination between Government Departments on this matter. For instance, research information about postcodes for financial inclusion is available to the Treasury and the DTI, but not to the Select Committee. Will he work with his colleagues in the Treasury to ensure that we get that information before the inquiry begins, so that a map can be made of the areas of financial exclusion? That will enable us to tackle the problem in a more co-ordinated way.

Mr. Sutcliffe: I acknowledge the work done on this issue over a number of years by the Select Committee, of which my right hon. Friend is Chairman. I shall be happy to appear before his Committee again, as I was the last time that I did so, but I shall make sure that the information that he requires will be made available before then.

Charles Hendry (Wealden) (Con): Even at this late stage, will the Minister reconsider his refusal to include more detail in the Consumer Credit Bill about what would constitute an unfair relationship? Is he not aware that both lenders and consumer groups are calling for greater clarity? Their concern is that as the Bill stands, it will harm the interests of borrowers. Without greater detail, lenders will become more cautious in their lending, driving those on the fringe to borrow from unscrupulous lenders or loan sharks at excessive rates of interest. Is not it wholly unreasonable to expect such issues to be resolved through the courts, requiring some unfortunate borrower to take on the legal might of the financial institutions to establish what is fair and what is not?

Mr. Sutcliffe: This is an issue that the hon. Gentleman and I have discussed throughout the stages of the Consumer Credit Bill, and I am not minded to change my mind on the unfairness test. That test replaces the extortionate credit test, which did not work for consumers. The unfairness test will give the courts the opportunity to decide all relevant factors. We also have the alternative dispute resolution procedure before the court-based system. Transparency is at the heart of the Bill to ensure that lenders and consumers know what they are letting themselves in for.

Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op): The pilot projects on loan sharks in Glasgow and Birmingham, to which my hon. Friend referred, have indeed proved successful. Glasgow city council, which is involved in the scheme with the Department, has written to me—and, no doubt, to other MPs in Scotland—pointing out that it has uncovered evidence of loan shark activity in my constituency, linked to that in Glasgow. Like the hon. Member for
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South Antrim (Dr. McCrea), I urge my hon. Friend to ensure that the pilot schemes on loan sharks are rolled out throughout the country as soon as possible.

Mr. Sutcliffe: My hon. Friend has a good record of support for people on low incomes and encouraging financial inclusion. We will look at the outcomes of the pilots, which are already good. The Glasgow project is looking at the rest of Scotland, but we will try to roll out to the rest of the UK the experience and skills developed in those pilot schemes.

Trade with India

5. Mr. Stephen Crabb (Preseli Pembrokeshire) (Con): What steps he is taking to increase UK trade with India. [33379]

The Minister for Trade (Ian Pearson): We are working to increase trade through the Joint Economic Trade Committee and the Asia taskforce. UK Trade and Investment provides direct support to companies and we also support the Indo-British Partnership Network.

Mr. Crabb: I wish to draw the House's attention to my entry in the Register of Members' Interests. The initiatives that the Minister outlines are important and to be welcomed, but is he aware of the real frustration and concern among many UK exporters that we are not capturing our appropriate share of the growth in India's international trade, given our shared history, linguistic ties and other potential competitive advantages? Does he agree with the director general of the British Chambers of Commerce, who said recently that there is too much focus on Europe as a trading bloc and that we must get out to where the action is?

Ian Pearson: I have no doubt that we can do more, but let us not forget the progress that has been made so far. In the first six months of this year, trade with India rose by 24 per cent. compared with the previous year. We had 49 trade missions in 2004, we have more this year and we will have still more in 2006. We are getting on with it. India and China are hugely important growth markets for the future—we should not be in any doubt about that—and I want UK companies to trade not only with those countries, but within the EU, with the United States and further afield. Exporting is fundamentally important to the future economic prosperity of the UK and the Government will do all that we can to support that industry.

Dr. Ashok Kumar (Middlesbrough, South and East Cleveland) (Lab): This is the first time in my life that I have seen a Government making so much effort to build relations between the UK and India. I praise the Government, from the Prime Minister down, for all the efforts that they have made.

Can my hon. Friend the Minister destroy the myth that has built up in the past few years that all the low-skilled jobs, in call centres and so on, are being shipped to India? Investment from India in this country is creating highly skilled jobs, and many highly professional, educated Indians are working—for example, in IT—and making a great contribution to this country.
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Ian Pearson: I agree with my hon. Friend. Indian companies and Indian investment are very welcome in the United Kingdom. Companies like Tata Consultancy Services are doing a terrific job here. He will be interested to know that our balance of trade with India is roughly equal. In the first half of this year, our exports to India were worth about £1.84 billion and our imports were worth £1.85 billion. That shows what we have done. He is also right to point to our continuing strong links with India. The Prime Minister's visit to India and the UK/India summit, as well as the EU/India summit, were important developments. We are working very hard through JETCO and the Asia taskforce to strengthen our relations, and we will continue to do so in the future.

Peter Luff (Mid-Worcestershire) (Con): Does the Minister share my concern that the public debate on our trade and investment relations with India is too often characterised by threats, rather than opportunity? In that context, does he welcome the decision of the Select Committee on Trade and Industry to launch a major inquiry into our trade and investment relations with India, which I expect to identify policy initiatives that the British and Indian Governments could take to build a sustainable long-term improvement in our trading relations, for the benefit of both countries?

Ian Pearson: I can only agree with the hon. Gentleman. I very much welcome the Select Committee inquiry. India and China have the ability to transform our world. That is highly likely to happen over the next 10 to 20 years. We must see the growth of India and China as an opportunity, not as a threat, and take advantage of the trading opportunities that will accrue as a result of their rapid economic expansion. As a Government, we are very seized of that, and we are developing our policies and ensuring that we put our resources behind encouraging and supporting our companies to take advantage of those opportunities.

Jeremy Corbyn (Islington, North) (Lab): The Minister will be aware that caste discrimination is a huge problem in India and that 160 million people in India suffer its consequences. Is he prepared to undertake discussions with any British company that operates or invests in India to adopt the Ambedkar principles, by which the people who are known as the scheduled castes in India would receive fair treatment, thus making our contribution to ending that appalling discrimination against so many people?

Ian Pearson: My hon. Friend raises an important point. We discuss those issues with the Indian Government, and we are very clear indeed about encouraging the corporate social responsibility of companies that invest in India. So I can assure him that the points that he makes are valid and taken into account in our discussions with industry and the Indian Government.

Mr. Michael Moore (Berwickshire, Roxburgh and Selkirk) (LD): Our trade with India is extremely important, but does the Minister agree that it must be conducted on a fair basis? Mr. Alistair Buchan, who is chairman of the Scottish Tartans Authority and
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Lochcarron of Scotland, based in my constituency, has highlighted websites, such as, which are passing off kilts and other products made in India as though they were made in Scotland. Will the hon. Gentleman look again at the regulations affecting websites and labelling to ensure that trading standards officials have the right powers to stamp out those abuses?

Ian Pearson: I am certainly happy to look at the specific situation that the hon. Gentleman mentions. We also want to sell more Scotch whisky to India, and tariffs are unacceptably high. One of the things that we want the Doha development round to achieve is not just help for the poorest countries, although that is absolutely central to our Government's policy, but we want India to reduce some of its tariff barriers, as well as a further strengthening of two-way trade with India. But I will get back to the hon. Gentleman with some answers to the specific question that he asks.

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