The Sharks are circling - but is it the Lib Dems they will ultimately devour?

OK….I have good days and bad days…..today happens to be a bit of a bad day……to be a Lib Dem.

I understand that coalition is about compromise and the art of the possible – honest – I do. What I don't understand is when we sign up to stuff that is totally contrary to what we say are our values. Does the preamble to our constitution count for absolutely nothing now? Er……."no one should be enslaved by poverty" was the bit I was particularly thinking about. So can someone explain to me why we think it is OK, at a time when our coalition policies are pushing more and more people into debt – we are cutting the Financial Inclusion Fund that pays for debt advisers and access to affordable credit? Why oh why is our parliamentary party apparently not supporting Stella Creasy's Credit Regulation motion on Thursday morning when it is absolutely in line with both the Coalition Agreement and party policy?

I quote: "The Government believes that action is needed to protect consumers, particularly the most vulnerable, and to promote greater competition across the economy. We need to promote more responsible corporate and consumer behaviour through greater transparency and by harnessing the insights from behavioural economics and social psychology.

• We will give regulators new powers to define and ban excessive interest rates on credit and store cards; "
  

and also

"We will introduce stronger consumer protections, including measures to end unfair bank and financial transaction charges."

Coalition Agreement 2010

And our own policy:

"....A statutory duty to be imposed on all lenders to lend responsibly, giving borrowers a statutory right of action in cases where there has been irresponsible lending.
Consumer protection to be strengthened with stronger penalties for those who mis-sell financial products using aggressive selling practices; with a statutory maximum interest rate to protect vulnerable groups from predatory loan sharks and doorstep lending."

Reforming the Financial Sector - Policy Motion Spring '10

And then there is our Consumer Manifesto:

"Credit and store cards can be similarly harmful with high interest rates and hidden fees. Average
credit card rates are currently at a high of 18.8% and for some people they are as high as 60% or
70%. Extortionate rates are charged to those who can least afford it, putting people already
struggling into a spiral of debt. While it is fair that card providers should be able to adjust their
rates to reflect who they are lending to, many credit cards go well beyond this.

The Liberal Democrats believe that these charges are unfair and would address the situation by:

• Putting a cap on interest rates credit and store card providers are able to charge. In
order to define what this rate should be we will consult with industry and consumer
groups"

And what does Stella's motion say?

"That this House notes with alarm recent evidence showing a fourfold increase in the use of payday lending since the beginning of the recession and that high cost credit lenders advanced approximately £7.5 billion to low and middle income consumers in 2008 alone; recognises the problems of financial exclusion, lack of financial and debt management education, lack of price competitiveness in the unsecured lending market and the near monopoly positions of many large lenders which contribute to the high costs of borrowing; considers that without action these factors could worsen family debt, poverty and financial difficulties to the detriment of the economic recovery; therefore calls upon the Government to introduce, alongside measures to increase access to affordable credit, regulatory powers that put in place a range of caps on prices in areas of the market in unsecured lending which are non price-competitive, likely to cause detriment to consumers or where there is evidence of irresponsible practice; and believes that such caps should take account of the desirability of maintaining access to affordable and responsible credit, the likely impact on the supply of credit and the cost of enforcement, that they should be regularly reviewed and that they should use the total cost of credit, calculated on a yearly basis, to ensure that lender avoidance and distortions in price are prevented."

Really.........what's not to like? What is out of kilter with our own and coalition policy? Who's playing games here? Or have we been got at by those in the industry who stand to lose out from this? Are we being lead by the nose to become a party of the haves rather than the have nots? Will our party election broadcast next year feature Nick Clegg walking through ripped up copies of the preamble to our constitution? Seriously, please my fellow Lib Dems, get a grip, continue to fight for what you say you believe in. Simon Hughes told the Fabian Society a couple of weeks ago that the progressives were "alive and kicking" in the party.........well some of us are feeling decidedly unwell at the moment and we need the medicine of seeing our parliamentary party fight for party policy, especially if it is in the Coalition Agreement, if we are to pull round!

Monday evening I attended a fantastic event – the launch of the All Party Parliamentary Group on Financial Education. It wasn't standing room only, there wasn't standing room - even Stephen Williams couldn't get in! And the attraction? One Martin Lewis of Money Saving Expert. I've never seen so many MPs in such awe – all queuing up to have their pix taken with him . And the word is that this is the biggest APPG ever, with 141 parliamentarians already signed up. Martin Lewis was clear and unequivocal – debt is a killer. People commit suicide because of debt. We have to educate our children and young people to be able to understand and manage their money and as he said "It's a national disgrace that in the 20 years since student loans launched we've educated our youth into debt, but never about debt. Now as tuition fees are getting bigger and some will pay commercial rates of interest for them, we simply can't let students take this debt out unless they know how it works."

This genuinely cross party group has Justin Tomlinson, Stella Creasy and our own Duncan Hames as co-chairs. All have been rightly working together to support Stella's motion. Surely this is not a party political issue? Surely all of us baulk at the idea of people paying ridiculous rates of interest of 444% apr? And what about Wonga – at over 2000%apr????! Surely, in times of austerity, more than ever, we need to be doing all we can to prevent people getting into unmanageable debt? Am I being unreasonable? So WHY in the name of everything decent and true, can't our MPs support this sensible motion as is?

I trust like me you will be horrified. If you are and have one of our esteemed Lib Dems as your MP – please, please contact them now to ask them to support this motion. If we are to escape from this coalition with even a shred of credibility then this is one of the shreds I would hope to escape with.

.......PS, if you want a less ranty perspective? SLF supports the motion!