There's no doubt that people in Southwark are feeling the squeeze. VAT has been put up to 20%, the cold winter meant big heating bills and food is costing more. And many have seen their pay frozen. As people struggle to make ends meet, pay day loan shops are springing up all over Southwark. This follows the national trend that shows that the number of people taking out payday loans has quadrupled over the last four years.
I would strongly advise people to think twice before taking out a payday loan. Interest rates are as much as 2500% APR and you can end up paying £3,000 on a loan of £500 for six months.
It is much better for people to go to their local London Mutual Credit Union - which will lend money at reasonable rates of interest. It is like a bank but it is run for the benefit of those who use it - the members - rather than shareholders. Unlike the city banks it does not pay out massive bonuses - instead it ploughs profits back for the people the credit union members. And unlike our high street banks it will not turn people away if they are unemployed or new in the country and can't show a UK credit history. Anyone who lives or works in Southwark or Lambeth can become a member of London Mutual Credit Union and get a Visa Debit card, a loan at fair rates and for savers, money is safe as it is guaranteed by the government.
And I am backing the London Mutual Credit Union in its quest to expand. It already has a loan book of £8 million and over 12,500 members. It has been so successful in providing honest financial services for over 29 years, it needs to move in to bigger premises. And I'm also backing their plans to start a new "payday loan" service. I don't want anyone to fall prey to door to door loan sharks or payday loan shops which fleece hardworking people.
It's not going to be an easy time ahead for people in Southwark. The decisions of the government are making the economy worse and unemployment higher. The last thing people need is to find they've got into debt paying huge interest on loans. London Mutual Credit Union is the answer on our doorstep.