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Emily Brothers Leads call to take on Sutton’s Debt Cowboys as research shows 49% of people in London struggle to make it to pay day

Tuesday 6 May 2014

Labour’s Parliamentary Candidate for Sutton and Cheam, Emily Brothers has spoken out about the growing personal debt crisis gripping Britain, as research shows 2 in 5 people struggle to make it to payday and that millions are now taking out payday loans and debt management plans to cope with the cost of living and debt repayment. In London 49% said they were in personal financial difficulty.
Speaking from Labour’s London launch of their EU and Local Manifesto held in Croydon today, Emily Brothers said:
“Whilst Paul Burstow may be celebrating modest growth, Sutton and Cheam residents are paying out of their own pockets for this fragile recovery – with many getting into debt or spending all their rainy day money as a result. Research from R3 shows 43% of us often struggle to get to payday and that this is due to household bills like energy, rent or repaying credit cards and payday loans.
“Due to Coalition policy the numbers of people using Sutton Food Bank have more than doubled over the last two years, rising from 797 to 2,039 and set to go up yet again. Many people in Sutton and Cheam have no savings and if interest rates rise or rents continue to go up we could see more families out on the street or becoming so called zombie debtors - paying just the interest not the capital on their debts – as they stuck in a spiral of debt from which they can never escape.
“That’s why it’s vital that we tackle the cowboys making money out of providing debt management advice and the legal loan sharks still profiting from these pressures. As well as action on our energy bills, I’m backing plans to get tough on debt management companies, to make sure people have access to good debt advice and alternative affordable finance.
“Anyone here in Sutton and Cheam worried about debt in our community should get in touch with Sutton Labour to be part of our work tackling these issues. The coalition may think they can ignore these problems, but I’m determined to tackle the zombies, sharks and cowboys head on!”
Labour has been pressing to amend the Consumer Rights Bill to address the fees that debt management companies charge as well as pushing for a levy on payday lenders to pay for debt advice provision. Locally the Sharkstoppers campaigners have been working with Credit Unions and Cooperatives around Britain to help increase the provision of alternative affordable credit.

Notes to editors

1. R3, the association of business recovery professionals, report in their March 2014 Debt Snapshot that 49% of people in London report struggling to make it to payday. Nationally 43% of all people in the survey said they were struggling.
2. As a consequence 8% of British adults say they are likely to take out a payday loan in the next six months, up from 6% in September 2013. However, 15% of under-35’s are likely to take out a payday loan in the next six months.
3. 28% of British Adults admit to having no savings, this is the highest it’s been since September 2012. 5% of British adults are currently on a debt management plan - this equates to 2.5 million people.
4. The most commonly cited cause of struggles to payday are the rising cost of food (59% of those who struggle to payday), the rising cost of household energy bills (52%), the rising cost of transport (38%), making credit card payments (27%) and rent payments (24%). R3 Debt Snapshot March 2014
5. Labour is leading the way in protecting vulnerable consumers from the debt cowboys. We led the campaign to end legal loan sharking and are tabling amendments to the Consumer Rights Bill to tackle debt management companies and aggressive marketing practices. At present the coalition has opposed all these measures.
6. Labour has also worked closely with the Sharkstoppers campaigners and the Co-operative Party across Britain to encourage more people to join a credit union and support credit unions as forms of alternative credit.
7. Sutton Labour Party’s Manifesto for the 2014 Local Election states that they will tackle debt and reduce the need for payday loan companies by:
• Develop an anti-poverty and social exclusion strategy as part of an overall fairness strategy;
• Review welfare provision in the borough.
• Strengthen advice services, to include a welfare benefits hotline;
• Support Sutton’s Credit Union as a people’s bank and a financial co-operative;
• Support other local authorities that are demanding new powers from government to curb high-stakes gambling machines in betting shops, as they are capable of taking bets of £300 a minute and contribute to debt.

Contact details:- E-Mail info@emilybrothers.com ~ Call 0776 506 0864 ~ Join Emily on Facebook