Tories target store cards in bid to end UK's 'debt addiction'

Published on Tuesday 17 June 2008 22:07

THE Conservatives yesterday vowed to ease Britain's "debt addiction" by clamping down on store cards which charge excessive rates of interest and inflicting a "social responsibility levy" on the financial services industry to pay for a national financial education programme.

The measures, unveiled by George Osborne, the shadow Chancellor, would see the Office of Fair Trading given new powers to clamp down on providers of store cards, which can charge interest rates of up to 29 per cent.

A further 50 million would be raised for a free national financial education programme, by inflicting a levy on the financial services industry.

Mr Osborne also wants a seven-day cooling-off period before people can start using store cards.

He said: "The role of the next Conservative government is to stop Britain's addiction to debt, and make sure when we next have a financial crisis or economic problem, we are much better prepared than we are at the moment."

However, a spokeswoman for the British Bankers Association said:

"Responsible lenders take steps to ensure they help people before difficulties reach crisis point. They already fund educational programmes, including debt counselling services. We would see any such compulsory scheme by a government as unnecessary."

Shoppers in the UK owe 2.2 billion on store cards.

Excessive rates of interest also cost the British public more than 55 million a year.