Agenda item

Access to Credit

It was moved by Councillor George Lindars-Hammond, seconded by Councillor Mazher Iqbal that this Council:-

(a)       is extremely concerned about the growing cost of living crisis under the present Government;

(b)       notes that working people are today an average of £1,350 worse off a year since the present Government came to power and forecasts show that over the course of this Parliament, that figure will reach £6,660;

(c)        further notes that in the Yorkshire & Humber region the average fall in wages in real terms for all employees between 2010 and 2012 is 8.1% or £1,721 per year;

(d)       is dismayed at the growth of highly unaffordable credit from payday loans with interest rates often higher than 5000% APR.

(e)       is particularly concerned by evidence suggesting that their use is highest amongst our country's most deprived groups;

(f)        believes that credit unions offer far more suitable schemes for those in need of short-term credit and commits to further promote the activities of Sheffield Credit Union;

(g)       notes the excellent campaign by Paul Blomfield MP in proposing Parliamentary legislation to regulate the activities of payday lenders and calls on all Sheffield MPs to support his bill;

(h)       praises the University of Sheffield for banning payday loan companies from advertising on campus;

(i)         further supports other campaigns about payday loans including Unite the Union's 'Stop the sharks' campaign and Labour Student's campaign to tackle payday loan companies targeting students; and

(j)         commits to reviewing advertising policy on Council sites to look to exclude payday loan advertising.

Whereupon, it was moved by Councillor Andrew Sangar, seconded by Councillor Roger Davison, as an amendment, that the Motion now submitted be amended by the deletion of all the words after the words “That this Council” and the substitution of the following words therefor:-

(a)       is flabbergasted that Labour politicians have the nerve to attack the Government on the cost of living, given that the previous Government:

(i)         crashed the economy, which is why the cost of living is higher now;

(ii)        scrapped the 10p tax, leaving half a million of the lowest paid worse off; and

(iii)       increased the state pension by an insulting 75p;

(b)       backs the actions of Liberal Democrats in Government, which have stabilised the economy, keeping interest rates and mortgage payments low, while cutting tax for working families, freezing fuel duty and raising the state pension by record levels;

(c)        notes with grave concern the unscrupulous practices of payday lenders and the distressing impact on consumers;

(d)       regrets that the previous Government failed to take effective action despite thirteen years in power;

(e)       supports the steps taken by the current Government to more effectively regulate the pay-day lending market, including:

(i)         passing regulatory control to the Financial Conduct Authority, which will clamp down on irresponsible practices with tough enforcement powers;

(ii)        referring the industry to the Competition Commission through the Office of Fair Trading;

(iii)       developing new restrictions on the advertising of pay day loans; and

(iv)       introducing effective financial education in schools;

(f)        welcomes reports that roughly a third of lenders referred to the Office of Fair Trading have already left the market due to the tough enforcement action taken;

(g)       however, calls upon the Government to carefully consider independent research by the University of Bristol, which stated that:

            “The evidence reviewed for this research does not show unequivocally that [interest rate restrictions] reduce the cost of borrowing to consumers, particularly those on low incomes”;

(h)       furthermore, welcomes the comments of the Archbishop of Canterbury that “We’re not in the business of trying to legislate you out of existence, we’re trying to compete you out of existence”;

(i)         therefore, supports the Government’s decision to invest £38 million to help credit unions modernise and effectively compete with pay-day lenders; and

(j)         resolves to continue to promote credit unions and other ethical lenders in Sheffield.

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

After a right of reply by Councillor George Lindars-Hammond, the original Motion was then put to the vote and carried, as follows:-

RESOLVED:  That this Council:-

(a)       is extremely concerned about the growing cost of living crisis under the present Government;

(b)       notes that working people are today an average of £1,350 worse off a year since the present Government came to power and forecasts show that over the course of this Parliament, that figure will reach £6,660;

(c)        further notes that in the Yorkshire & Humber region the average fall in wages in real terms for all employees between 2010 and 2012 is 8.1% or £1,721 per year;

(d)       is dismayed at the growth of highly unaffordable credit from payday loans with interest rates often higher than 5000% APR.

(e)       is particularly concerned by evidence suggesting that their use is highest amongst our country's most deprived groups;

(f)        believes that credit unions offer far more suitable schemes for those in need of short-term credit and commits to further promote the activities of Sheffield Credit Union;

(g)       notes the excellent campaign by Paul Blomfield MP in proposing Parliamentary legislation to regulate the activities of payday lenders and calls on all Sheffield MPs to support his bill;

(h)       praises the University of Sheffield for banning payday loan companies from advertising on campus;

(i)         further supports other campaigns about payday loans including Unite the Union's 'Stop the sharks' campaign and Labour Student's campaign to tackle payday loan companies targeting students; and

(j)         commits to reviewing advertising policy on Council sites to look to exclude payday loan advertising.

(Note: Councillors Shaffaq Mohammed, Rob Frost, Sylvia Anginotti, Colin Ross, Joe Otten, Penny Baker, Roger Davison, Sue Alston, Andrew Sangar, Cliff Woodcraft, Denise Reaney, Ian Auckland, Bob McCann, Katie Condliffe, David Baker, Alison Brelsford and Trevor Bagshaw voted for paragraphs (d), (e), (f), (h), (i) and (j) and against paragraphs (a), (b), (c) and (g) of the Substantive Motion and asked for this to be recorded.)