Agenda item

That this Council:-

(a)       welcomes the UK-wide campaign to end ‘legal loan sharking’;

(b)       believes that the lack of access to affordable credit is socially and economically damaging; unaffordable credit is causing a myriad of unwanted effects such as poorer diets, colder homes, rent, council tax and utility arrears, depression (which impacts on job seeking behaviour) and poor health;

(c)        is aware that some loan and credit companies are charging annual interest rates equivalent to over 2500% (despite the Bank of England base rate being just 0.5%); borrowing at these rates repeatedly tips customers into inescapable cycles of debt and poverty;

(d)       further notes that unaffordable credit is extracting wealth from the most deprived communities;

(e)       anticipates that the situation is likely to get worse as wages are not increasing at the rate of inflation and an increasing number on low incomes are accessing 'pay day' loans and at the same time people will struggle to adjust to universal credit payments which will be paid monthly, resulting in thousands of residents struggling to balance their personal finances;

(f)         believes it is the responsibility of all levels of government to try to ensure affordable credit for all, and therefore pledges to use best practice to promote financial literacy and affordable lending; this will help to ensure that wealth stays in the local economy;

(g)       pledges to help promote credit unions which are community based organisations offering access to affordable credit and promoting saving in Sheffield;

(h)        calls on the Government to introduce caps on the total lending rates that can be charged for providing credit; and

(i)         believes that cleaning up the finance industry is essential to a sustainable economic recovery.

It was moved by Councillor Mazher Iqbal, seconded by Councillor Cate McDonald, that this Council:-

(a)       welcomes the UK-wide campaign to end ‘legal loan sharking’;

(b)       believes that the lack of access to affordable credit is socially and economically damaging; unaffordable credit is causing a myriad of unwanted effects such as poorer diets, colder homes, rent, council tax and utility arrears, depression (which impacts on job seeking behaviour) and poor health;

(c)        is aware that some loan and credit companies are charging annual interest rates equivalent to over 2500% (despite the Bank of England base rate being just 0.5%); borrowing at these rates repeatedly tips customers into inescapable cycles of debt and poverty;

(d)       further notes that unaffordable credit is extracting wealth from the most deprived communities;

(e)       anticipates that the situation is likely to get worse as wages are not increasing at the rate of inflation and an increasing number on low incomes are accessing 'pay day' loans and at the same time people will struggle to adjust to universal credit payments which will be paid monthly, resulting in thousands of residents struggling to balance their personal finances;

(f)         believes it is the responsibility of all levels of government to try to ensure affordable credit for all, and therefore pledges to use best practice to promote financial literacy and affordable lending; this will help to ensure that wealth stays in the local economy;

(g)       pledges to help promote credit unions which are community based organisations offering access to affordable credit and promoting saving in Sheffield;

(h)        calls on the Government to introduce caps on the total lending rates that can be charged for providing credit; and

(i)         believes that cleaning up the finance industry is essential to a sustainable economic recovery.

Whereupon, it was moved by Councillor Shaffaq Mohammed, seconded by Councillor Alison Brelsford, as an amendment, that the Motion now submitted be amended by the addition of a new paragraph (g) as follows and the re-lettering of original paragraphs (g) to (i) as new paragraphs (h) to (j):-

(g)       welcomes the Government’s commitment to investing £38m in helping Credit Unions to modernise and expand;

On being put to the vote, the amendment was negatived.

The original Motion was then put to the vote and carried, as follows:-