Why it matters: Cap interest rates

A mum is tapping on her phone in Southampton. A few clicks on the new Wonga app and she can get a loan. She knows the interest rates are crazy, but the kids are going back to school and they need new uniforms, and the rent hasn’t gone away. Her pay packet’s not enough; loans are essential to cover the cracks.

It’s expensive to be poor. And it’s lonely. The mum I met in Southampton – let’s call her Karan – didn’t even want to tell me her real name. Others tell me they lie to cover up their debts. They can’t afford to go out and they fall out with friends over cash. It’s time to build a movement that ends this isolation and limits the debt. It’s time to bring people together to fight for a British interest rate cap.

The Archbishop of Canterbury, Justin Welby, should be applauded for taking the lead in this campaign. Parliament may not have had the courage to introduce a formal cap on rates since the 1500s, but in the wake of the financial crash, attitudes have changed. Now that we the public own over 80 per cent of RBS and our taxes underpin the entire British banking system, we have a right to regulate interest. The present system is the worst case of the cash rich exploiting the very poor for the highest rates they can get away with. Democracy should protect people from this exploitation of power. The next Labour government should change the law.

But our movement shouldn’t just exist to pressure politicians to pass legislation: it’s also about building positive alternatives in our communities. In Southampton, our Labour party is working with local residents, churches and Movement for Change to prevent the debt that looks set to spike in the run up to Christmas. As people seek out loans for presents and extra food for the holidays, we’re looking at setting up a credit union stall outside every pay day loan shop in the city for one weekend. This will give people a positive alternative to legal loan sharks, not just at Christmas, but throughout the year.