Payday lenders: We should all think about the difficult position the Tories are in

Whatever the Tories would have you believe, poverty is on the up. Everywhere you turn there are desperate stories of evictions, hungry children and food banks. One of the consequences of this growing population of desperate people, is that investors have moved in. Where there’s desperation, there’s profit.

Pay day loan companies are taking over our high streets. Yes, of course there are examples of an emergency boiler repair and with no other source of credit, a family uses this service and has a positive experience. And of course this type of credit is more expensive as the risk of default has to be built in to ensure a return on the lenders’ investment. However, every single day, vulnerable people are being exploited. The Office of Fair Trading accused 50 named companies of “irresponsible lending”. I strongly disagree with anyone who believes annualised interest rates of over 5,000% are anything other than a disgrace.

When in Government Labour fought hard on this issue. Millions of pounds of resources were provided to ensure the most vulnerable in our society could access free debt advice (via the financial inclusion fund).

In opposition Labour have continued to fight hard on this issue. Despite not succeeding in the House of Commons, in the House of Lords, Labour have successfully forced through an amendment allowing regulators to control costs and loan duration.

And when Labour are back in Government this work will be able to accelerate and several plans have already been announced. Councils will receive new powers to control expansion of this industry in their areas (via planning laws), Labour will work hard to reduce stigma and increase awareness of the services provided by credit unions and Labour will re-introduce measures to improve financial literacy education.

The Tory record is extremely different.

Planning laws have been changed which has resulted in payday lenders expanding more easily.

In 2012 significant cuts to the financial inclusion fund were announced, including the loss of 500 specialist debt advisors.

As for the powers pushed through by Labour in the House of Lords, allowing the Government to force tighter regulation of this industry, well they haven’t bothered to use them. They have failed to seize this opportunity and have systematically failed to stand up for the most vulnerable in our society.

However, it must be very difficult for the Tories, what with payday lenders being their friends, donors and even employers. For example, how can we possibly expect Tory MP Sir Gerald Howarth, a paid consultant of QuickQuid (who feature on OFT’s list of 50), to step in and curb abuse carried out by payday lenders? We should all think about the difficult position the Tories are in, caught between the exploiters and the exploited.

Posted in Conservative, Government, Labour, Payday lenders | 1 Comment

Royal Mail: why some people will be happy to see it go

Some will argue that Labour started the privatisation of Royal Mail and so shouldn’t oppose it now. It’s true that when in Government, Labour proposed reforms which paved the way for privatisation. However, the 2009 Postal Services Bill specifically included a clause stated that “each Royal Mail company must at all times be publicly owned”, meaning private interests would always be on a minority basis. Losing control of a service that 29 million homes and businesses rely on was never an option.

In little over a week, a 370 year history of public ownership of Royal Mail comes to an end.

Lots of Royal Mail sites are in prime locations, your high streets. There is a very good chance that the public will see these sold and relocated to industrial parks. Price increases and service standard decreases (particularly to those in non profitable rural areas) are also likely once we lose Royal Mail. It is not surprising that several polls show around 70% of the public oppose privatisation.

The staff aren’t too happy about it either. A staggering 93% of Parcelforce staff voted against privatisation. Naturally, the CWU served legal notice of their intention to ballot members for strike action. The result will be announced on October 16th. Luckily for David Cameron, shares begin trading on 15 October.

So if everyone hates the idea, why are the Tories so intent on pushing through this sale?

Royal Mail makes money. A lot of money. In May, preliminary financial results showed operating profits for the last year of 403 million pounds!

David Cameron and George Osborne happen to need some money. A failed economic plan has seen 245 billion pounds of borrowing that they didn’t plan for. So in true Tory style, they are ripping apart our country and selling it to their friends, piece by piece.

What the Tories have also tried to keep quiet, is that they have made arrangements to ensure that not only will we obviously lose future profits of Royal Mail, but we will be keeping the historic pension deficit and liabilities. In other words, they are privatising the profits and nationalising the debt.

Of course, it is unfair of me to say that ‘everyone’ hates the idea. I assume Goldman Sachs and UBS are quite happy. In true democratic style, the Government have refused Freedom of Information requests about how much the banks will be paid for handling the sale, but estimates are as high as £30m (Sunday Mirror article http://www.mirror.co.uk/money/city-news/royal-mail-privatisation-banks-set-1983088).

So in reality, there are lots of people who will be happy about the privatisation of Royal Mail: The Tories will be able to cover up some of the failure of their economic plans, their friends are set to get a very good deal on the flotation price (at our expense) and the banks will be rewarded handsomely. Would we expect anything else from David Cameron?

Today sees campaigners out, up and down the country. Please follow on #SaveOurRM

Posted in Conservative, Government, Labour, Privatisation, Trade Union | 5 Comments

The Gagging Bill: a clever move

Do we want a country where any organisation can throw millions into election campaigns? Of course not, and it is for this very reason that the Labour Party introduced strict limits on 3rd party spending in the Political Parties, Elections and Referendums Act 2000.

Don’t let the Tories suck you in. What they are trying to achieve, quickly and in time for their General Election campaign, is an attack on free speech. They know they are on borrowed time and if they can stop Charities and Trade Unions speaking out about the devastating affects of their policies, they will. This is about votes. This is about power.

So what about the scandals that prompted this debate? Well actually, they’re pretty irrelevant. David Cameron has carefully crafted a bill that would leave the likes of tobacco lobbyist Lynton Crosby well alone. In simple terms, Lynton Crosby would still be free to advise the Prime Minister on tobacco policy, but Cancer Research UK would be stopped from campaigning about it.

A pretty clever move by David Cameron.

Posted in Conservative, Government, Labour, Lobbying, Trade Union | 9 Comments