There’s no doubt that people in Southwark are feeling the squeeze. The cost of living is rising, wages are frozen, the cold winter means big heating bills and food is costing more. As people struggle to make ends meet, pay day loan shops are springing up all over Southwark.
When ambulance driver Tom needed money quickly, he turned to a pay day loan company he found online. Before long his £500 loan had multiplied into a massive £3,000 debt. And when Lisa, an administrator, needed money for a new fridge, she took out a pay day loan to tide her over until she got paid. She offered to pay it back in instalments but this doubled the interest. Before long she owed nearly £500.
At a time of austerity, more and more of my constituents are finding it harder to make ends meet. The London Mutual Credit Union (LMCU) is there to help people like Lisa and Tom. I was therefore delighted to open their new head office in Peckham and hear from staff about the services they provide.
Credit Unions are community banks. They provide services like a bank but are run for the benefit of those who use it – the members – rather than shareholders. And unlike the banks, they don’t pay out massive bonuses. They put profits back into the credit union for the benefit of members.
The new LMCU in Peckham is a welcoming place, staffed by local people, that offers a range of financial services including alternative ‘payday’ loans costing a fraction of the rate loan sharks charge.
This could not come at a more important time because from the 1st April, 8,700 hard working families in Camberwell and Peckham will see their working tax credits cut. And although Government has found the money to give millionaires an average tax cut of £100,000, the cuts keep coming.
In Southwark alone, changes to Council Tax Benefit will affect 24,000 households - mostly families with children and single parents, and 3,743 council tenant households will be taxed on their spare rooms. The most vulnerable are not exempt either with an estimated 990 constituents losing their Disability Living Allowance (DLA) in the transition a new payment system.
With payday loan shops blighting high streets, loan sharks stalking local estates and banks refusing to lend, there has never been a greater need for the excellent services of the LMCU.
Credit unions do the things that other banks don’t do. They lend money at reasonable rates of interest. And unlike banks, they won’t 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 the LMCU and get a Visa Debit card or a loan at fair rates.
It’s not going to be an easy time ahead for people in Southwark. The decisions of the Tory Lib-Dem 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. LMCU is the answer on our doorstep.