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Thursday, 3 February 2011

Giving credit where its due.

Today we hosted a debate in Bradford about debt and credit - under the shadow of the brand new building housing the HQ of 'Provident Financial', the UK's largest doorstep lender.

Three speakers gave their views on Debt; Alan Thorton from Church Action on Poverty (CAP), Marriane Clough from Christians Against Poverty (confusingly, another CAP) and Karen Bailey from Bradford Metropolitan Credit Union. Amongst the audience, we were joined by a representative from the Provy.

Alan Thorton outlined the case for another type of 'cap' - a cap on overall cost of repayment of debt, (being discussed in Parliament today) and argued that companies such as Provident Financial, should not be allowed to make a killing out of the most vulnerable in society. He described how the Provy made on average £90 profit per person. In Bradford, where they have over 10,000 customers, that means they have made nearly a million pounds of profit from the poor of this one average sized city.

Alan was also critical of the way that 'Christians Against Poverty' accept money from the Provident, especially as the Provy make much use of that fact to show they are a 'caring company'.

Christians Against Poverty argued that their job was not to be political, but just to help those who ended up in debt. Marriane did her best, but it did look like accepting even small amounts of money severely compromised their position. They clearly did not campaign for a cap on loan as an organisation.

Karen Bailey from the Credit union was awesome - she knew her stuff and had gone through times of being in debt herself. When the middle class woman from the Provident tried to criticise the Credit Unions figures, it was Karen who ended up looking far more credible. The woman from the Provident opposed a cap set at any level, and argued that lending rates should be set by the lender, with no limits whatsoever.

That made her and the company she represents look arrogant and offensive. They make huge profits from the poor, and then expect to be able to look like a legitimate and fair business. It simply does not wash.

The debate drew good media coverage, and we learnt that Marsha Singh labour MP sided with the poor and argued for a cap, whilst David Ward, Libdem MP sided with the Provident.

It felt like hard work drawing it all together, but I think the event, drawing crucial players together for the first time, played a vital contribution to the national debate on debt. Access to affordable credit is going to get worse under this government so we'd better work on some solutions before it does. If not, the Provident will be laughing all the way to the bank.

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