UK labour urges May to cap credit card interest payments

by BLOOMBERG

LONDONThe UK Labour Party urged Prime Minister Theresa May to cap interest payments on credit-card loans to help families trapped in a “debt spiral”.

The Conservatives have presided over the slowest wage growth since Napoleonic times, the main opposition said in an emailed statement on Sunday, flagging comments its finance spokesman, John McDonnell, would tell activists at Labour’s annual conference in Brighton yesterday.

McDonnell will propose extending rules on interest payments for payday loans to cover credit-card debt to ensure repayments never total more than twice the amount of the original loan.

“The last seven years of Tory economic failure has created the perfect storm: As wages have fallen behind, more and more families are being pushed deeper into debt,” McDonnell will say. “I am calling upon the government to act now to apply the same rules on payday loans to credit-card debt. It means that no one will ever pay more in interest than their original loan.”

The proposals continue Labour’s push to improve living standards in Britain that the party says have been damaged by years of Conservative austerity policies. Meanwhile, cracks have already started to appear in the Tory resolve to rein in costs since May surprisingly lost her majority in a snap election in June.

Earlier this month, May ended her determination to cap annual public-sector pay rises at 1% by awarding police officers and prison guards bigger increases. — Bloomberg